Swindled out of my negotiation fee - opinions please

Foreclosures, Short Sales, Tax Foreclosures
1

I negotiated a deal for a homeowner that in essence the lender (JP MOrgan) would not pay a negotiation fee for. The homeowner spoke with the buyer about this and the buyer agreed to pay me 5k for getting the deal done. Originally they wanted to increase the sales price (after I had approval) so that the 5k could be included on the HUD - but I’ve had deals bomb when I did this in the past so I explained this and it was decided the buyer would pay me outside of closing. I then invoiced the buyer and well two weeks later and the agent tells me that the buyer is actually going to pay the seller this money - and that I should ask the seller for it. Funny the day after the deal closed, I contacted the seller to talk about the fee - I contacted him then again two other times since - two weeks later, not a response - hmmm. Well the seller is claiming bk - how convenient. Seems the buyer and seller are in cahoots if you ask me. I look back now and wish I had just put that fee on the HUD and whatever happened happened; my first mistake. Other than that, I am sure I have no recourse but wondered if anyone could give an opinion on the situation.

I do have two other deals for this seller and I have drafted an email to the agent stating basically that if the situation with the fee is not resolved by Monday - that I resign as negotiator for the two other deals. I feel a bit bad but at the same time, I don’t play around - I work very hard on these deals and I am quite successful so to have someone gip me like this does not give me much motivation to continue working for them. Opinions please :anon

2

I’ve ran into the same problems so I understand how you feel. I also see that a lot more banks are starting to cut out our negotiation fees. Since then I have come up with at theory on how we can collect.

We as negotiators are providing a service. That being the case, there is no reason why we can’t put a service lien on the property. Once recorded, we can place our lien on the HUD-1. There is really no way around not paying us otherwise the lender just won’t be able to close.

I will be putting this theory into practice as of this coming week. I will keep you posted on how it develops.

3

some of my associates put the title in trust prior to starting the short sale, giving them control.

4

hassansr you aren’t having trouble closings with trust?

5

The only problems i have when using trusts has been when I allowed the buyer to use their own closing attorney, and not mine. Their attorney thought it wasn’t legal to hold title in trust and spooked out both the buyer and their lender. They wanted me to waive the trust and deal directly with the owner. I had to pull the sale and wait 3 more months to close with another buyer.

Going forward I always use the same attorney to close when I buy and when I resell the same house.

6

Well I’m happy to report everything worked out just it was supposed to - at least we all agreed who was paying what - and I have it in writing :slight_smile: now it’s just a matter of receiving the funds. I’m anxiously waiting. :smile