Short Sales: Use 3rd Party Negotiators or Keep Them In House??
I was at the REO Expo in Dallas a few months ago. An agent asked a panel this same question. I watched David Sunlin (Loss Mit Pres. for Bank of America) say "An agent should NEVER, EVER use a 3rd party company to negotiate their short sales". I then watched the head of Loss Mit for CITI and the department head for Freddie Mac who were sitting next to him both firmly nod their heads YES in agreement. Regardless of what the 3rd party negotiation companies say, or what would now appear to be only a small percentage of agents say, 3rd party negotiations aren't needed or wanted in the transactions. So, lets take a look at what Short Sale Negotiators are, or pretend to be.
"Short Sale Negotiator" could be a bit of an inapropriate designation. The reason for that is many so-called short sale negotiators do not actually negotiate - they don't fight for the seller. All they do is present paperwork and accept paperwork back. They don't solve problems at all. A short sale negotiator should be a problem solver, a person who works on behalf of the seller to reach a short sale settlement with the bank.
Lets revisit part of that last sentence: A short sale negotiator represents the seller, NOT the bank. Part of the problem associated with short sale negotiators is often the individuals who hire the negotiator are not sure whether the negotiator represents them or represents the bank. At no time is the negotiator ever a representative of the bank unless the seller has no short sale negotiator. Sometimes, sellers are under the impression that they do not need a short sale negotiator. They think they can negotiate the short sale directly with the bank because the bank will help them to negotiate it. That kind of thinking is like asking the fox to help one guard the hen house. The bank is not on the seller's side. In fact, quite the opposite. The bank's objective is to maximize return at whomever's expense as long as it's not its own. It could be at the seller's expense or the buyer's expense, but the entity the bank is protecting is itself. A short sale negotiator should have the seller's best interests at heart at all times. An ethical short sale negotiator would never sell the seller down the river to make a fast buck. It is the negotiator's job to persuade the bank to allow the short sale to happen, and to minimize the expense and headache to the seller. The best outcome is a total release of liability for the seller with no out-of-pocket expense for the seller.
Charlottesville Real Estate. Realtor/Owner of Virginia Real Estate Solutions at RE/MAX Assured Properties Charlottesville Real Estate Experts
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Lets revisit part of that last sentence: A short sale negotiator represents the seller, NOT the bank. Part of the problem associated with short sale negotiators is often the individuals who hire the negotiator are not sure whether the negotiator represents them or represents the bank. At no time is the negotiator ever a representative of the bank unless the seller has no short sale negotiator. Sometimes, sellers are under the impression that they do not need a short sale negotiator. They think they can negotiate the short sale directly with the bank because the bank will help them to negotiate it. That kind of thinking is like asking the fox to help one guard the hen house. The bank is not on the seller's side. In fact, quite the opposite. The bank's objective is to maximize return at whomever's expense as long as it's not its own. It could be at the seller's expense or the buyer's expense, but the entity the bank is protecting is itself. A short sale negotiator should have the seller's best interests at heart at all times. An ethical short sale negotiator would never sell the seller down the river to make a fast buck. It is the negotiator's job to persuade the bank to allow the short sale to happen, and to minimize the expense and headache to the seller. The best outcome is a total release of liability for the seller with no out-of-pocket expense for the seller.
Types of Short Sale Negotiators
The best short sale negotiator is the individual who directly represents the seller. This person may or may not be paid an upfront fee. In California, for example, a person cannot negotiate a short sale unless that person is a lawyer or licensed to sell real estate. But that doesn't stop crooks from representing themselves as a short sale negotiator.- Real estate agents who are short sale negotiators. You will find some agents who negotiate short sales but do not call themselves a short sale negotiator. They don't use the term because they are afraid they will get sued for practicing law. There is a fine line between practicing law and negotiating a short sale, so, we short sale agents tread carefully.A reputable short sale negotiator who is a licensed real estate agent will always advise the client to obtain legal and tax advice. The negotiator will keep the client apprised of the short sale process and never make decisions without consulting the client. For example, I routinely handle my own negotiations because I don't trust anybody else to do it exactly the same way I would do it. Most agents also don't charge an upfront fee.
- Short sale negotiators who are lawyers. The problem with some lawyers who handle short sale negotiations is in order to do a volume of business, sometimes lawyers must hand over the day-to-day processing to law clerks or paralegals. These people are paper pushers. Which is fine unless that person does not have a real estate background or is uncomfortable trying to explain real estate documents yet must negotiate with banks.Before hiring a lawyer to negotiate your short sale, ask the lawyer if he or she will personally negotiate the short sale or if the negotiation is handed primarily handed to an employee. Generally, a lawyer will charge an up-front fee for short sale negotiation and put overly high figures onto the HUD1 statement.
- Short sale negotiators who are third parties. What is a third party negotiator? It is a person who does not represent the seller. This third-party negotiator could be another agent at the agent's company or it could be a person who is not licensed. The first thing to find out is whether the third-party negotiator has a real estate license.Personally, I believe the more removed a person is from the transaction, the less likely that person will be successful. The reason is third-party negotiators generally do not know the seller, have never spoken to the seller and are not as capable as a negotiator who does know the seller. Some third-party negotiators will try to charge the buyer for negotiation. Buyers should not have to pay a third-party negotiation fee.
Charlottesville Real Estate. Realtor/Owner of Virginia Real Estate Solutions at RE/MAX Assured Properties Charlottesville Real Estate Experts
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Short sale is very popular in this days and people pay all money in time which is known as short sale. People can get good credit by short sale.
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