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not so good update on the house...i think we need a lawyer

So...yesterday we had a talk with our father in law who is helping us out with the house, he is the one that communicates with the realtor since he has the time and the knowledge
it turns out that there is something fishy going on
he wants us to pay him what he calls "loss mitigation fee" in order to negotitate with us, this "fee" he wants to charge us is $5,000 and he wants it CASH and he wants it not to be listed anywhere in the contract....under the table much?
we are little bummed out because we have waited for this short sale house for 3 months and now that it comes through this corrupt guy wants to rip us off...
:(
has anyone heard of any real state agents doing this? is this legal? is this common??
:( so sad...
BabyFetus Ticker Bravado Bras at Nurtured Family

Re: not so good update on the house...i think we need a lawyer

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    edited December 2011
    I've been through three short sales in the last year... we closed on our house a few weeks ago.... not once in the year and a half that we looked at short sale properties did anyone ask for this kind of money.  We were explained that that kind of charge goes into the realtors pocket... it may not be illegal (I dont know if it is or not) but it certainly is unethical.  The realtor should be dealing with the short sale negotiator and bank only and there shouldnt be any additional monies you would have to pay up front.  The biggest red flag of all is the dont put it in any contract issue.  If I were you I would immediately contact the bank that is negotiating the short sale (sellers bank) they cannot discuss the sellers loan or anything related to it with you but you can make them aware that the sellers real estate agent is trying to extort 5k from you in order to sell the house and hes doing it behind the banks back.  They may have something to say about that.  I would also contact the sellers directly and tell them as well.  I'm sure since they not only lost their house but all the equity that they had in it - they wouldnt feel the same about paying him a commission if they found out hes trying to get 5k out of you.... when they wont be making a dime!!!!!  Girl.... go on a rampage... this is just wrong
    image image imageLilypie Premature Baby tickers
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    edited December 2011
    Thanks so much
    We are looking for this kind of advice, we were so freaking angry, this is just plain wrong and unethical and if this is the terms for this house as much as we love it we are NOT giving in to being robbed in our faces...and of 5K cash...
    we knew for the beg that there was something weird going on....
    we want to still be able to get the house without paying the 5K and without having to go through all the paperwork for the house again
    So you are saying the first thing we should do is contact the sellers bank and also the seller and let them know?
    also, this was all verbal so if anything this guy can wash his hands and pretend he never said any of this....how do we handle this!?

    trust me....i am pissed...made me wait three freaking months after looking for another 4 to try to steal from me?!! UGH!

    BabyFetus Ticker Bravado Bras at Nurtured Family
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    edited December 2011
    Our biggest frustration was how little the buyers are involved in the process... think about whats happening here... the owners are underwater... their bank has agreed to let them sell the house for less then they owe... this is better than foreclosure for many reasons... for the bank they dont have to pay a lawyer to go through the process and then they would have to pay the repairs etc and the maintenance on the property until they can sell it which could take over a year with no mortgage coming in... the owners avoid foreclosure and the credit damage it does and opt for a lesser hit to their credit but they have to pay the commission to the realtors and possibly the difference between what the bank gets paid (from you guys) and whats owed.  So the bank loses money in the short term but saves money in the long term and the owners get out from under that house with less damage done then if they were foreclosed on.  So where in this equation would the sellers real estate agent think he is entitled to additional monies.  I did some research and the "loss mitigation fee" is normally charged by a third party offering to negotiate the deal for the sellers.  The real estate agent doesnt have any loss to mitigate.....
    image image imageLilypie Premature Baby tickers
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    edited December 2011

    He may be trying to collect this money for the sellers.... (or pocket it because hes a creep)... sounds like you guys dont have your own agent right?  My suggestion to call around is just to raise the alarm.  Imagine if the bank and owners do not know he is trying to charge you this.  IF it was a legitimate cost it would be part of your closing costs if and when you actually purchased the house.  No cost should be paid up front ever....

    At this point in the deal you should know exactely who you are dealing with in terms of the bank.  Bank of America now uses a totally automated system but there are negotiators assigned to each offer... Other banks have good old fashioned people assigned to each deal that should be dealing with the agents on a weekly basis. 

    image image imageLilypie Premature Baby tickers
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    edited December 2011
    Its time for you guys to get involved personally - not that your FIL isnt getting the job done... only because you may lose this house because of this.  Are you guys pre-approved and ready to go?  has your offer been accepted or did you just put the offer in and hes asking for this money?  email me if you want my telephone number...

    my email is my screen name at hotmail . com
    image image imageLilypie Premature Baby tickers
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    edited December 2011
    P.S..... short sales are not at all short in any way... we have been attempting to purchase property for 15 months (not including looking)  we put offers on a bunch of houses that were never even responded to.  Now things are supposed to move smoother but we lost the last deal after 10 months and we even had a closing date (apprasied value screwed us) and our first offer sat on the table for even longer and never made it very far because of an undisclosed second mortgage on the property.... I know its super frustrating to get your hopes up about a house... I did the same thing every time... it made me sick.  Buying short sales is a crap shot... my suggestion is see a lot of them... make offers on more than one... cross your fingers and keep looking even if you really want one you have an offer on....

    The one we eventually bought look less than three months and was smooth sailing, the price was pre-approved by the sellers bank, they were ready to leave and very cooperative, we used our own real estate agent (we found one who is a short sale specialist and quite frankly amazing!), we were preapproved with sufficiant funds for closing in the bank and wham bam thank you maam we got the house..... it will happen for you also... get all your ducks in a row first and it makes it easier...

    PS - our mortgage broker is the one who negotiated the short sale with the bank (more so than our agent) do you have a mortgage broker working with you?
    image image imageLilypie Premature Baby tickers
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    edited December 2011
    I wouldn't even think about giving him this money, contact the company this realtor is working under, his boss, the owner I don't know but do not pay this shady person any cash!

    Good Luck with everything
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    edited December 2011
    oh yeah marnie
    no worries we are NOT paying him a dime
    he is a JERK

    and adriana i just emailed you :)
    BabyFetus Ticker Bravado Bras at Nurtured Family
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