Why Hire a Third Party Negotiator that is compliant with MARS-FTC Rules
Hiring a third party to negotiate short sales is not new. It is actually becoming more and more common with the increasing liability agents are facing. Call your E/O provider and ask if they'll cover you in short sale negotiations.
It makes sense that you see more and more listings popping up with a disclosure regarding a third party negotiating a short sale. Agents are realizing the value in outsourcing, not just in the legal sense, but primarily the time saved involved in negotiating.
Third parties all approach the collection of fees differently. Up until recently some negotiators charged clients up front for fees (usually to the seller), but no longer is that possible with recent MARS-FTC rulings, unless you are a lawyer.
Only lawyers can charge up front fees for negotiating and even lawyers have certain guidelines they must adhere to. There are third parties that charge the agents (buyer's and seller's agents) a portion of their commission, whether it's 1-2% and sometimes that's split between the two agents involved.
There are some third party negotiators that charge a portion of the sale amount that is paid by the lender or agents involved. It may be 1-5% of the purchase price. Mortgage Assistance Services is compliant with the new MARS-FTC ruling. Our company get's paid by the Lender 95% of time, we never take any upfront fee's, and only get paid if the short sale closes!!
There are certainly all different ways to recover the time spent on negotiations and each 3rd party approaches it differently and utilizes the method most comfortable to them. There are also lawyers that charge up front fees in compliance with MARS-FTC rulings.
What should you watch out for when hiring a 3rd party negotiator?
Well, for starters, you want to know how they are paid. Any negotiator not getting paid on the HUD may face serious liability. Fees should be disclosed somewhere in the listing agreement or on the MLS if it's charged to the buyers.
Call your AG's office and make sure no complaints have been filed against the company you're doing business with.
Review negotiation contracts and make sure they are MARS-FTC compliant along with any other necessary disclosures.
Mortgage Assistance Services is compliant with the MARS-FTC laws MOST STATES do not require a license to negotiate a short sale. New Hampshire 3rd party negotiators must adhere to the 479:B law if they are not a licensed agent, attorney, etc. Licensing is NOT an indication of success, but it is good to know.
Our Professional Short Sale Team has many years in the Mortgage industry or we hold a Real Estate License. So you know you are working with knowledgeable negotiators!
Communication. Honestly I think the #1 thing that makes someone successful as a negotiator is easily the simplest and most forgotten, which is communication. I don't care if the lender hasn't reviewed the file for three weeks or longer, a good third party negotiator is updating the agents, homeowners, title companies, etc., regularly. A good negotiator should have IMMEDIATE communication with a homeowner/Realtor if a lender has requested information, given an approval, or needs assistance.
A good negotiator will also match the preferred method of communication. I've had some homeowners/Realtors who responded better to texting than emails, some who needed phone calls instead of emailing. A good negotiator finds out up front how they prefers to be contacted. Make sure you know exactly how they'll be communicating with you.
Be wary of anyone that promises they can get the sale done in a certain amount of time, or can get a short sale approval without a deficiency clause. NO one, not even a lawyer can promise that.
So who should hire a 3rd party negotiation company? Well, for starters, anyone who isn't comfortable or doesn't feel they have the knowledge to negotiate a successful outcome. Many agents we work with are new and not experienced with each lender. They lack the necessary knowledge for whatever reason. Agents who are too busy to handle the mounds of paperwork, time on the phone with lenders, creating HUDS, faxing of paperwork, coordination of negotiators, coordination of closing agents, title companies, etc., are also another type of agent that may want to consider hiring a third party negotiator. Many of the agents we work with want to concentrate on volume listings and not on dealing with lenders.
We have agents who come to us and admittedly confess they aren't good at dealing with bank negotiators. Many times a negotiator from the lender gets aggressive, mean, confrontational, and agents REACT. They've come to us and said they realize their reactions made the situation worse, so they were ready to let someone else deal with the frustration. Another type of agent that we've gotten phone calls from are those who are sick of short sales. They may be very experienced, but are tired of dealing with the lenders and anxiety of the situation. BELIEVE me many homeowner's who are short selling their homes are anxiety ridden.
For Realtor's that negotiate their own short sales!
Outsourcing short sale negotiation is an excellent way to increase your volume if you're an agent, and interested in avoiding the lengthy lender process. If you're a homeowner in search of information, many third party negotiators are readily available and most focus only on negotiating, not listing, showing, or marketing property. Their only focus is helping homeowners/Realtors navigate the short sale process with ease.
