There has been a wave of deceit being perpetrated by realtors around the county – listing agents who inflict short-sale negotiator fees upon the buyers of their listings.
If a listing agent needs help processing a short sale, they should pay for it, not the buyer.
What’s worse is that this fee is either camouflaged, or not disclosed at all until after the offer is accepted. I have been involved with transactions having short-sale negotiator fees as high as 2% of the sales price.
People have been complaining, so Sandicor, the company that runs our MLS, finally addressed it on the system’s home page:
“There are numerous questions that our industry is faced with based on the climate of today’s market. Sandicor is seeking to find answers for those issues that directly relate to the MLS. A very popular question pertains to the use of a short sale negotiator and the fees associated with negotiator services. After seeking legal counsel it was determined that it is only necessary to disclose the amount the buyer’s agent is being offered through the MLS and if necessary the formula the listing agent will be using to make that offer. If the listing agent cannot determine that amount by using the CBB field(e.g. X.96%), then the listing agent shall disclose the formula in the CFR (CFR = confidential remarks).
What IS allowed in the CFR:
“Any reduction in commission to be split xx/xx “minus X%”.
What is NOT allowed in the CFR:
“Any reduction in commission to be split xx/xx “minus X% for short sale negotiator fee”.
“Buyer to pay negotiator fee” **
**Seller and buyer negotiations are not permitted in the MLS. The contractual agreement enforceable in the MLS is between listing and cooperating broker.
My point? Sandicor and our governing body, the local board of realtors, are doing nothing to stop the fraud and deceit being inflicted upon consumers and fellow agents.
They both have the opportunity to help agents provide a better experience for clients. But instead of banning negotiator fees, or at least allowing them to be fully disclosed, they lay out guidelines on how to disguise them. They are hiding behind lawyers and mergers, either scared or oblivious to doing what’s right.
I’m embarassed to be a part of these organizations, and look forward to a complete overhaul, or elimination.