Short sales and the sale of bank-owned properties showed steady increases in the Puget Sound area through 2011, according to the Washington Property Solutions Annual Short Sale Statistics Report.
The percentage of single family home sales that were short sales remained fairly consistent from 2010 to 2011. The increase in distressed property sales overall as compared to 2010 is attributed to a steady increase in the number of bank-owned property sales. The report includes historical sales data for both Short Sales and Bank-Owned Properties in King, Pierce, Snohomish and Kitsap counties.
Wednesday, February 8, 2012
Monday, February 6, 2012
Short Sale War Stories: How A Third-Party Negotiator Can Kill Your Short Sale
Over the past few weeks, we've heard a number of stories from brokers who've had their short sales held hostage by third-party negotiators. Here are a few cautionary tales:
Case #1
The listing agent contracted with a third-party negotiator who typically gets paid out of closing costs (1.5% of the purchase price). However, in this case, the bank was not willing to pay buyer's closing costs. The buyer did not have an additional $7,200 in cash to bring to closing. The listing agent was willing to kick in 1% and requested that their negotiator take 1% instead of 1.5%. The negotiator refused to complete the sale without being paid the full 1.5%.
Case #2
A law firm negotiating a short sale neglected to have the listing agent or seller sign a services contract, leaving it unclear who was responsible for paying their 1% fee. Once the short sale was approved, the firm asked the listing broker to pay the fee of $3,100 and threatened to not allow closing until they were paid.
If you depend on a third-party negotiator for your short sale listings you are to a large degree at the mercy of their process and their timing. One third-party negotiator claims that their fees are paid by the lender "over 50% of the time." If the lender opts not to pay the fee, you may get stuck paying some or all of it.
So what are your options? We believe that short sales are foremost real estate transactions, and they should be handled by real estate brokers. Negotiating the short sale should be a part of the professional services that the broker offers at no additional fee to anyone. When we co-list with broker partners, we take the responsibility of negotiating the short sale. Our co-listing commission is 1% of the sales price. There is no fee to the buyer or buyer’s agent. The best way to avoid being taken hostage by a third-party negotiator is for you to be in control of the sale.
Case #1
The listing agent contracted with a third-party negotiator who typically gets paid out of closing costs (1.5% of the purchase price). However, in this case, the bank was not willing to pay buyer's closing costs. The buyer did not have an additional $7,200 in cash to bring to closing. The listing agent was willing to kick in 1% and requested that their negotiator take 1% instead of 1.5%. The negotiator refused to complete the sale without being paid the full 1.5%.
Case #2
A law firm negotiating a short sale neglected to have the listing agent or seller sign a services contract, leaving it unclear who was responsible for paying their 1% fee. Once the short sale was approved, the firm asked the listing broker to pay the fee of $3,100 and threatened to not allow closing until they were paid.
If you depend on a third-party negotiator for your short sale listings you are to a large degree at the mercy of their process and their timing. One third-party negotiator claims that their fees are paid by the lender "over 50% of the time." If the lender opts not to pay the fee, you may get stuck paying some or all of it.
So what are your options? We believe that short sales are foremost real estate transactions, and they should be handled by real estate brokers. Negotiating the short sale should be a part of the professional services that the broker offers at no additional fee to anyone. When we co-list with broker partners, we take the responsibility of negotiating the short sale. Our co-listing commission is 1% of the sales price. There is no fee to the buyer or buyer’s agent. The best way to avoid being taken hostage by a third-party negotiator is for you to be in control of the sale.
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