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?
Certified Distressed Property Expert, Home Retention Councilor