Third Party Negotiators

By
Real Estate Agent with Coldwell Banker Select Professionals

I received an e-mail yesterday from another Realtor telling me about how she works with this cash investor who will write an offer for my short sale and then negotiate with the lenders on behalf of my clients, the sellers and get the deal done.  All I have to do is sit back and wait for the settlement because this investor will do all the work for me.  Such a deal!!!

Then I began to do a little thinking (I hate when that happens).  Anyway, my fiduciary duty is to protect my client, the seller.  That responsibility goes beyond just getting the property sold.  Is this investor going to worry about whether or not the lender is going to waive their right to deficiency, or is the he going to expose the seller to increased risk.  As an aside, in the case the investor is male, lest I be thought a sexist, but that's another story.

I also have severe reservations about my clients turning over their social security numbers and financial information to a person they don't know.  What is the risk for identity theft?  How do I know that all of this very personal information is going to be kept confidential and not find it's way into the hands of someone who doesn't subscribe to the same code of ethics that Realtors are bound to?

It would seem to me that a Seller's agent who "takes advantage" of these 3rd party negotiator services without taking some precautions and doing some due diligence would be guilty of neglience at the very least. 

Ultimately I've decided that the decision should reside with the client.  When presenting the offer, I take great pains to explain not only the financial terms of the agreement, but the ramifications of turning over all this financial information over to a third party that is not obligated to keep their best interest in mind.  Should they decide to proceed, a big long disclosure and waiver has to be signed.  At least then, I'll have something to stand on when I get called in front of an ethics board and/or the real estate commission.

What say you?

 

Paul Chase

Certified Distressed Property Expert, Home Retention Councilor

Comments (16)

Janice Roosevelt
Keller Williams Brandywine Valley - West Chester, PA
OICP ABR, ePRO,Ecobroker

If the credentials of the third party are presented, perhaps there is a way to establish credibility and smooth out the process.

Jun 04, 2009 11:43 PM
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Real Estate Agents - Luxury - Divorce

Just say bye...not going there...you have taken the time to invest in being a CDPE...we are all here to support you...at no charge...use us...use the organization...don't throw your sellers down the black hole of what is supposed to be negotiation...foreclosure is too scary a thing to trust to a 3rd party.

Jun 04, 2009 11:44 PM
Anonymous
Paul

My first thought was exactly to say No, I negotiate my own deals.  Then I was reminded that all offers have to be presented, not just the ones I like.  That doesn't mean I have to support or encourage the offer.  I still believe the ultimate decision resides with the seller.  If they want to accept the offer and the understand all the ramifications, then who am I to say no?

Jun 04, 2009 11:51 PM
#3
John Combs
Alan Deblat Real Estate Corp. - Oceanside, NY

Anytime a buyer says "don't worry about it", start worrying. There are no free rides and although this could work, the agent  still needs to be very involved.

Jun 04, 2009 11:56 PM
Renée Donohue~Home Photography
Savvy Home Pix - Allegan, MI
Western Michigan Real Estate Photographer

From what I understand these "investors" take and double escrow the property.  This has to be disclosed to the lienholders and if it is disclosed properly, do you think your odds of approval go up?  I believe the chance of approval on these things are a snowball's chance in hell.

I get tons of these requesting me to take short sales and let them do the work.  I refer my short sales out to a well known short sale agent and do not want to take on the liability of this type of transaction especially when it involves shenanigans like this.

Jun 05, 2009 12:04 AM
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

I have tried 3 of these negotiators. In one word DON"T.

Follow the directions of the bank, get your package together completely. Don't leave on document out, label each page with the

  • Name of client
  • Address of Property
  • Loan number

Send it off, wait a few days and call them. Then start negotiating. You can do it.

Jun 05, 2009 12:06 AM
Gordon Sloan
Group1 Real Estate, selling houses in Salt Lake City Utah - Salt Lake City, UT
Salt Lake Homes For Sale, Salt Lake Real Estate

I think that by giving up negotiation rights to this 3rd party you have given up your ability to watch out for your clients interests.

No deal should be negotiated with the lender without your input.

I say pass!!

Jun 05, 2009 12:13 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Paul ultimately it is the seller's decision, but I would insist on staying involved.

Jun 05, 2009 12:15 AM
Cheri Swigart
Stone Mountain Realty and Building Co. - Asheville, NC

Your client should consult with an attorney and accountant.  3rd party negotiators are in it for themselves.

Jun 05, 2009 12:17 AM
Kim Curran
RE/MAX Unlimited of Northern Virginia - Bristow, VA

We are seeing some listings that are requiring these negotiatiors-maybe not the same type-but the listing clearly states that the buyer will pay for their services @ $750+ on the HUD-1.

I question these services that buyers are being forced to use.

Jun 05, 2009 12:17 AM
Laura Gray
RE/MAX Realty Group - Gaithersburg, MD

Paul - If you took the time to become CDPE certified that use those skills to succesffully negotiate the transaction. Partner up with a local attorney that has experience in Short Sales to help you through one or two to help you learn the process first hand.

Jun 05, 2009 12:23 AM
Goodbye Active Rain
Out of Real Estate

Paul, if you are in business, you need to trust the person.  I'm doing the same thing a Realtor in California.  He trusts me because of my experience.  We are all in this for a win-win situation.

Jun 05, 2009 12:29 AM
Anonymous
Paul

I do negotiate my own deals.  I posted this mostly to get the conversation going and to get a feeling as to what's going on in the rest of the world.  While I do feel that I need to present the offer that includes using the negotiator, I strongly discourage their use.  For those who hold the CDPE designation and listen to the monthly calls, you know that Vanessa used to be a 3rd party negotiator and is now strongly discouraging their use.

I feel very strongly that a Realtor who doesn't negotiate their own transactions shouldn't be doing short sales.  Those listings should be referred to an agent who has demonstrated competence in this specialty area.  In fact, NAR's code of ethics demands that we only involve ourselves in areas of real estate in which we are competent.

Jun 05, 2009 12:52 AM
#13
Chip Jefferson
Gibbs Realty and Auction Company - Columbia, SC

I think we all get the emails saying how easy this can be and beneficial to your clients. In my area I dont have to work SS. Thank god!

Jun 05, 2009 12:53 AM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Watch to fees of the third party negotiators. Some organizations are offering assistance with no front end fees.

Can the agent be held legally liable for recommending a party that charges excess fees and is not successful with the negotiations?

Follow me on Twitter: http://twitter.com/roykelley

Jun 05, 2009 01:17 AM
Anonymous
Terri

I have used third party negotiating for years. The negotiator I use has my clients best interest at hand and she fights for the rights of my clients on every transaction. I do not charge the seller the negotiation fee I pay for this out of my own pocket or my title company pays for it. This is a service I offer at my own expense. I close approx 5-7 short sale deals per month and all with her help.. This frees up a lot of my time and i don't have to deal with paperwork or the banks. She collects all the paperwork directly from my clients. She gets the complete packet into the bank. she contacts the bank at least 3 times per week. she give me and my clients daily updates. and she even attends the BPO if it is near her. What more could you ask sfor?   I would however stay weary of big companies that offer this service because I wouldn't know that they had every ones best interest involved.

Jan 15, 2013 11:28 PM
#16