When an agent lists a property as a short sale, it involves working many long hours on very thick files. Since many agents do not know the proper protocol for handling short sales, this need was filled with a middle man: enter the "short sale negotiator." If you don't know a Certified Distressed Property Expert, how do you weed out the good from the bad?
Licensing: All negotiators need to be licensed real estate agents and their license number should be displayed. Don't let them tell you that they don't need a license to negotiate debt forgiveness, or to process paperwork. That goes for any agent who is handling your short sale.
Compensation: Your agent or negotiator should not hit you up for money before performing any services. Real estate agents get paid when the deal is closed. No close; no paycheck. If you are a buyer and a negotiator asks for compensation, say no and go look for another house. Trust me, you don't want to get into a contract like this!
MLS Issues: If you are a buyer and the listing agent of the property you want asks you to pay for the short sale negotiator, that may even be against MLS rules. I would find another property if I were you.
Track Records: It's usually a good idea, right? In this case, the short sale negotiator scammer may be very good at making up what the bank wants to hear about the sellers they represent, so their record may look impressive. Sure, they've closed a lot of deals. But are they ethical?
Short Sale Flips: I'm not against flipping. I've done a few. Buyers are happy, the contractors I hire to do repairs, carpet and paint get work, and I make a small profit. However, some bad eggs are using short sales to make big bucks. They arrange to have a "buyer" bid on the property at a very low price and do not show the seller or the bank any other real offers. The "buyer" buys at that very low price, and the negotiator and his "buyer" partner turn around and sell the property for a higher price. That stinks.
A Final Word! If you are in the distressing predicament of having to unload your property for less than you owe, the only way to be sure you are being taken care of in an ethical and legal manner is to hire a REALTOR who is also a Certified Distressed Property Expert. These professionals, of which I am one, have gone through training on how to take a seller through the process of getting their home sold so they will not have to go through the devastating effects of a foreclosure. I have personally helped many sellers in this position. Is it a lot of work? You bet. However, as long as there are sellers who need my expertise in this area, it is my mission to help all I can, despite the thick files and long hours needed to get these escrows closed satisfactorily.
