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Short Sale Negotiatior (SSN) Fees and the Dept. of Real Estate (CA)

By Phil & Celeste Pafford

Real Estate Broker/Owner with PaffordHomes.com, Corona CA

December 24, 2010 06:38 AM

With all the comments about Short Sale negotiators (SSN), and "requiring" the buyer's to pay the SSN fees, I wanted to bring the rules into the discussion.

While there are many good and practical points (both sides) as to why the Listing agent requires the buyer's to pay, and why the buyer pushes back and refuses to pay... where does the Department of Real Estate (DRE) in CA stand?

Note: I'm not taking sides.... just injecting the DRE into the discussion.

According to the Department of Real Estate (DRE) in CA, the buyer CANNOT be required to pay the SSN fees. Charging the buyer is characterized as "stretching" the law to conform to the listing agents viewpoint. If the listing agent chooses to use a negotiator, then they cannot "require" the buyer's to pay.

Yes, we all know the "work arounds" and how offers can be "overlooked" if the buyer's don't agree to pay, but I thought we all should understand the what the DRE (CA) has to say.

The following DRE gov .pdf even contains oddball scenarios blogger's usually provide to explain how their work-aound is valid.

Everyone needs to be up to date on this topic in today's Short Sale market!!

Please go to the following link and print for your records:

http://www.dre.ca.gov/pdf_docs/ca/ConsumerAlert_ShortSalesUpdate.pdf

PaffordHomes.com

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Jack Mossman - The Nines Team at Keller Williams in Stockton

The Nines Team At Keller Williams - Stockton, CA

The Nines Team at Keller Williams in Stockton

Phil and Celeste - Even the DRE has admitted that everything is not as clear cut as to "have to" or "need to."

It is becoming more frequent for the servicing companies of short sale transaction to require the BUYER to pay a specific fee. We just got a package from a very well know provider which requires specific language to be included in the listing contract that includes a MLS notation that the buyer must pay a 1% fee based on the sales price to the servicer. Offers will not be considered without an addendum accompanying the offer. Needless to say, it is making our life difficult ... the listing agent is specifically excluded from being able to contribute to the fee (but not the buyers' agent?)

More stuff just around the corner .... there are so many variations already ... so expect more soon!

Have a great holiday season! AND, thanks for the reference document!

Dec 24, 2010 06:45 AM

Nick T Pappas

Assoc. Broker ABR, CRS, SFR, e-Pro, @Homes Realty Group, Broker/Providence Property Mgmnt, LLC Huntsville AL - Huntsville, AL

Madison & Huntsville Alabama Real Estate Resource

Phil & Celeste-it seems that there is always something new to learn especially when dealing with distressed properties. Off to check out the link...Happy Holiday to you!

Dec 24, 2010 06:52 AM

Anonymous

Phil Pafford

Jack - Actually I should have put a "date" within this blog because the rules seem to be changing by the minute. Who knows if the DRE hasn't already "updated" this link! ;-)

Nick - yep, and it won't sit still! Welcome to Real Estate in 2011.

Dec 24, 2010 07:08 AM

Todd Merkle

Real Living Kee Realty - Washington Township, MI

So Mr or Misses listing agent, you would like my buyer to pay MARKET PRICE for your short sale listing, and then pay an additional fee on top of that? (sometimes as much as $4,000) Let me ask you, would YOU do such a thing if YOU were purchasing for yourself?

The listing agent is performing a service (selling the home) at the request of the SELLER. The SELLER hired you, so the SELLER (or their bank) pays the short sale negotioator fee. I will NEVER recommend that any of my buyers pay this fee, and so far haven't had a buyer decide to do it against my recommendation.

Mar 26, 2011 08:00 PM

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