Short sale negotiation is a difficult, frustrating and time-consuming part of the residential real estate business. Many Realtors who have done a short sale negotiation in the past have told us that they want to run kicking and screaming into the night at the thought of doing another one. They’ve realized that the sale wasn’t worth the number of hours necessary to successfully bring the deal to a close.
When considering outsourcing the short sale work, a Realtor has two choices:
• Engage a real estate attorney who will charge the client upfront and progressively for their services.
• Engage an experienced short sale negotiation company whereby the client is not charged a fee, neither upfront nor progressively. The short sale negotiation fee is paid by the buyer of the short sale property at closing.
Listing or selling agents cannot charge separate short sale negotiation fees. Charging a commission is their only legal source of compensation from a transaction. In years past, some Realtors have set up “sideline” LLCs through which they run a short sale service and thereby charge negotiation fees. Most real estate boards would frown upon such a dodgy approach, if they were clear that this was happening.
The Realtor has a fiduciary obligation to obtain the best service for their client. Just like a general medical practitioner would refer a patient to a specialist for treatment outside of their usual services, so can a Realtor refer a short sale to a specialist. The highest service is to refer the client to a specialized service, to an experienced short sale negotiation company.
What should a Realtor look for in a short sale negotiation company?
The following factors should be considered:
- What is the business reputation of the personnel of the short sale negotiation company? If Better Business Bureau complaints have ever been filed, have they been satisfactorily resolved?
- How long has the short sale negotiation company been in business?
- What other Realtors have used the services of the short sale negotiation company?
- Does the short sale negotiation company provide meaningful testimonials?
- Does the short sale negotiation company have a system in place for working with the client and do they regularly report to the client and to the listing Realtor? Experienced coordination between Realtor and the negotiation company is needed.
- Does the short sale negotiation company include in their initial presentation a general discussion of related issues to be aware of, including tax issues? Do they refer these matters to other professionals, like CPAs as a matter of course?
- Is there an openness by the short sale negotiation company to have the originating Realtor stay on as the listing Realtor?
What are the benefits to a Realtor in using Short Sale Specialists?
- Take the burden of extensive paperwork off of your plate
- You don’t have to “learn as you go” and fear that you’re missing something important
- Gives you your time back so you can work on other listings
- Preserves your profitability from the commission, with your not having to spend time on a non-paid service by you
- Provides an “added value” service to your clients that costs you nothing.
- Gives you the best chance for closing the deal
- Protects your reputation as a knowledgeable Realtor providing comprehensive solutions for your clients
- You become known as a Realtor who stands out in the crowd and doesn’t run from short sales
Short Sale Specialists USA welcome referringing agents who want to stay on as listing agent to serve their client. In this case, the negotiation work is undertaken by us and the agent receives their full real estate commission. Short Sale Specialists’ separate fixed negotiation fee is paid by the home buyer only upon successful completion of the sale. Any agents who would rather not stay involved in the process would be paid a referral fee, acceptable under real estate board practises.