Did you just take a new short sale listing and don’t want to handle all of the calls to the banks and tedious paperwork? OR maybe you just don’t have the time! It’s time to experience the benefits of an experienced and successful short sale negotiation team!
Short sales can be time-consuming, frustrating and difficult. However, they will continue to be a big part of the real estate market over the next few years so you can’t avoid them. To help expedite the process, listing agents are using the services of negotiators.
A great short sale negotiator will allow you to concentrate on the more traditional role of an agent, which is marketing and selling properties. This leaves the problematic and time-consuming tasks of preparing complete packages to the negotiator. Experienced negotiators are also effective at getting lenders to approve the sale in an expedited fashion.
Making the decision to hire a negotiator is easy. Finding the best one will even be easier after reading this article!
You need to be careful in selecting the right person for your team! The Department of Real Estate also advises against the problematic conduct of certain short sale negotiators. There is a legal and proper way a negotiator should conduct business.
Below are the items your negotiator should abide by!
1. Licensing – the negotiator should be a licensed real estate broker or a licensed salesperson who is working under a broker. According to the California Association of Realtors – “An indication that a SSN is not properly licensed is when the short sale negotiation entity is an LLC. In California, an LLC cannot get a real estate broker’s license and therefore, should not be doing short sale negotiation.”
2. Payment of fees – most negotiators cannot be paid upfront due to the DRE’s advance fee requirements. According to C. A.R, the least problematic method of payment is for the listing agent to simply pay the SSN out of the listing agent’s side of the commission. For example, if the commission for a transaction is 6% and the SSN fee 1%, the listing broker could offer 2.5% to the cooperating broker on the MLS, and then out of the 3.5% listing side of the commission he or she would earn, pay 1% to the SSN and keep 2.5%.
A. Both C. A.R. and the DRE have also released guidelines specifically for asking the buyer to pay for the negotiator fee. They state that it is legal but the Negotiator must be properly licensed and “there is an understanding by and full written disclosure to all parties in the transaction, including the short sale and originating lenders.” Further, to ensure complete transparency, “the compensation should be disclosed to all parties in writing, both in the purchase agreements and in the escrow instructions, and the fee must be property documented in the appropriate line item(s) in the HUD-1 closing statement.”
3. Disclosure of SSN fee – the negotiator fee that is being paid by the buyer, seller, listing agent or buyer’s agent should be disclosed, both to the buyer’s lender as well as to the seller’s short sale lender. According to CAR “Any attempts to hide this fee could constitute loan fraud (18 U. S.C. § 1014). Depending on the specifics of the act, loan fraud is a crime that can lead to significant jail time, fines, and the loss of one’s DRE license.”
4. Evaluate the abilities of your Negotiator: make sure the SSN is worthy of hiring on your team. You should be aware of their process and how experienced they are. Here’s just a few questions on what to ask:
A. What specific services will you provide? b. What percent of short sales do you get approved? c. Have you worked with my client’s specific lender? d. Are you able to give us an estimated turnaround time for this lender? e. Do you see any particular issues in my client’s situation?
The Short Sale Experts, Inc. team takes each and every one of these criterias very seriously and will always be legal and proper in the way we conduct business. We can make your life easier and help expedite the process. We’ve established contacts at the banks and know how to prepare and present the packages. Ultimately, we’ll negotiate and get the deal done in the quickest manner possible.