can someone please tell me if you can legally charge for any upfront fees when doing a short sale process? I am hearing different stories about this and definitely do not want any big fines for doing so.
thank you
no you can’t charge someone upfront fees in north carolina. You can only charge once you get the desired results. Also if you plan on being the buyer there is no way you can charge a consultant fee and then turn around to buy the house, unless you set up more than one company.
thank you for your response. I am wondering about the state of NJ. Any idea?
Thanks again
Curious. Why would you charge upfront fees to process a Short Sale?
We often do loss mitigation work and charge upfront fees for that. However we offer a guarantee that we will get a forbearance or most of the fee is refunded and then we try to convert them to a short sale.
I don’t get why you want to charge upfront for doing a short sale?
Here in Texas, the Attorney General has gone after people who charge upfront fees for loss mitigation work. I’m sure I’m probably missing the whole story, but I know that there are unscrupulous investors that “took the money and ran.” I see that you provide a guarantee, so that’s different. It’s just that b/c of a few bad apples, charging an upfront fee with or without a guarantee puts a bad taste in some regulators mouths.
In most States they are going after Investors and Realtors that are charging up front fee’s to the Homeowner in foreclosure
is New Jersey one of them?
thank you
Upfront fees for “loss mitigation” is something that could easily be seen as immoral. I had a lead from a homeowner that mentioned they were already working with a company (who will remane nameless) and they wanted 2 months mortgage payments to negotiate a short or forebearance or a workout. What happened was they took her money, 2000 bux! There are those out there making hard sales pitches about “helping” homeowners in foreclosure by doing Loss Mitigation, be wary! There should never be a fee for a homeowner. If anything they should be compensated on the back end…
In So Florida alot of investors are charging fees of 1months rent. I find this to be immoral and decieving to the homeowner. WHO cares about a guarentee. Try and collect when they can not S/S the home from them which is why they operate as a LLC. Opps…they disappear or go out of business and open up a new LLC.
Also as a homeowner your having hugh financal problems and about to lose your home and need move to move and rent and then you expect someone to pay for the work to be done. Investors get paid when they sell the home or assign the contract.
One homeowner I know wanted to do a short sale and was ready to give the investor $1800 for the S/S, Then I painted a picture for them. The investor sends out postcards , hangs flyers and advertises in papers. With the avg 1month mortgage in SoFl in the $1700-2500 a month range. If the investor can get 10 people to pay him in 1 month, that is about $20000 a month income, or $240K a yr (Not bad for never closing a deal). For 2-3months they can lead the homeowner on and say NO short sale or no investors interested, sorrry… And what…they do not pay you back since it is an adminstrative fee for doing work they never done…
UNETHICAL…I wish all states would ban this in some way. Time to crack down on those investors NOW before they ruin the S/S market too