Market Wise Q&A: Suggestion for a Short Sale Negotiator makes Agent see Red
Pat Kapowich for the San Jose Mercury News column Market Wise
Q: We were about to make an offer on a short sale property when the listing agent told our buyer's rep that we would have to pay a negotiator 1 percent of the sales price. That individual would in turn present our offer to the bank. We were informed the negotiator is out of town but has completed 15 short-sale transactions for this listing team. The fee stipulation was acceptable to us. However, our rep put up such a fuss that the listers are now working with another buyer who also is agreeable about paying for the negotiation. Is our agent correct in thinking this whole negotiator business is fishy?
A: Absolutely. You were just standing on the porch of another cottage industry created by the real estate meltdown. This ludicrous trend sanctioned by the lending institutions allows listing agents, hired to negotiate on behalf of their client, to shift that duty to out-of-town third parties. Let me repeat: The main purpose of a real estate agent is to negotiate. Delegating that responsibility while receiving compensation can easily be deemed an unearned fee. Worse, listing agents charging an additional fee for the critical function they were hired and paid for is, at best, irresponsible.
Anyone negotiating with a bank on behalf of a seller must be licensed. Your buyer's rep rightly must have asked himself one uncomfortable question after another: Does this negotiator possess a sales or broker's license? If he or she is a licensed salesperson, is his/her managing broker supervising this questionable enterprise? Does he/she work for a reputable firm and carry proper insurance? Finally, who are these individuals and why is their identity kept under wraps?
Conversely, your buyer's rep was hired to look after your best interest, and did so by questioning this transaction instead of creating one. Unlike the listing team, which seems to be in the process of traveling down a wrong road in order to earn a fast buck, your licensee is steering toward a long and credible career.
Saturday, December 5, 2009
E-mail questions to Pat at firstname.lastname@example.org