Short sale closed in MI...finally...(seller view) (negotiating, agent, commission)

[kimba01]

I listed a year ago, it has been a long process full of twists and turns and lots of learning. When I listed the agent advised me that they use a company to handle their SS. I would not be responsible for any payment to this company, the title company or anyone else they need to talk to for the sale (I had a small lien on the home, so they were going to consult their atty).

Fast forward a year later and tons of ups and downs, the bank denies payment to the SS company. The SS company president calls me and asks if I would be so kind to make the payment. I had no idea that there even was a possibility that the bank would do this. Frankly, my contract was with the realtor, not the SS guy. He informed me that he usually receives $3000+ for his services but would take $1K from us. Well, I just didn't have it. I was not aware of this. I also had to take money to the closing so that the bank would give me a waiver of deficiency, which I was aware might happen. I had to borrow that.

There came another issue right before closing and it had to do with property taxes. It almost didn't happen. Again, I clamored and borrowed more money to get this closed. At the last minute, the SS guy gets the bank to cover that bill and then proceeds to ask for $500. more because of that. Well, since he had asked for $1K originally (and I was not legally liable for even that) I ended up paying him the $1K. At the closing he accepted it. In the meantime, I left the closing to go deposit the ck I wrote for taxes and the teller told me that since the SS guy's check was written to a business that it would be deposited and my funds would be available to cover it. She claimed that he could not withdraw from that unless he had funds in his account to cover it.

Lo and behold, apparently he did not have the funds in his account, tried to cash it, couldn't, and then called me threatening to stop the closing with the title co. unless I came up with $1500 cash! Ok, this went on and on, him texting me that he would get the cops over, that he hoped karma would get me...on and on. I was in disbelief. It was the MOST unprofessional transaction in my life. I contacted the agent (seriously, this was HIS guy, not mine!) and he said he would talk to the SS guy and get back to me. That was two days ago and I have not heard a word from him. Sure, he got his commission and buh-bye. I am still stunned. The check is cashed (I should have put a stop payment on the thing!) What a mess. The worst of it was that the agent allowed this raving person to continue to harass me without stepping in and nipping it.

So...moral of this story, make sure if you use a SS company, that you know your financial obligations up front and IN WRITING. Or, better yet, search for a realtor who specializes in SS themselves and who is not too lazy to do the legwork for their commission. I am not saying the SS guy should not get paid, on the contrary, I believe he did more for my sale than my agent did. My agent should have compensated him. Ridiculous. I am writing to the RE company to voice my disappointment. Good luck!

[ufkenmill]

Something tells me that the "president of the company" was just a guy in his basement trying to make a buck off a short sale. Did you sign anything up front that disclosed this fee to you? According to the FTC they're not allowed to try to collect any advance fees and if you do agree to a fee, it's only payable when you get the approval they were negotiating for and that you wanted. If it's not a fee in writing, then it's not a fee, period..

Here's an old press release from the ftc:
FTC's Mortgage Assistance Relief Services Advance Fee Ban Takes Effect

[kimba01]

Thank you for the article.

I did not sign anything about his fees. This was a company that my agent uses to do their shorts. I signed a paper acknowledging only that fact. The agent assured me that there would be no charge to me for the SS guy's service. I am still not happy about having paid him. I probably should not have. But...water under the bridge now. Just hope someone else here can learn from this. He did the job. The realtor should have compensated him. I never sent the letter regarding my disappointment. I have not heard from the realtor and I have not received any closing docs except a paper from him at the closing from the lender describing their agreement. Apparently I need to make a phone call. What a joke.

[ufkenmill]

well at least you got it over with. the guy sounds like a jerk - but like you said, it's water under the bridge. If it were me I know I'd be tempted to sue the guy in small claims since you never signed anything that stated there was a fee. It's not that he can't charge you a fee AFTER the successful negotiation, it's that he's gotta tell you in advance in writing. But is it worth the effort? Probably not.

[Giesela]

I would take the realtor to smalls claims and try to get the money you paid the SS guy back. Sounds like a scam to me anyway - for all you know the SS guy is a buddy and gives the realtor a kickback on top of the realtor comission.
Even if you don't have money for a lawyer I'd threaten his his realty company with a lawsuit just to make them sweat a little and at least pay more attention to the scams this guy is involved in.

Sorry you went through all this, bad enough to have to short sale your house much less do it while all sorts of vultures are causing you additional grief.

[jackmichigan]

Kimba: First of all, you should write a letter to the broker (the individual or company that listed your property) and detail how you were not satisfied with the closing and demand that you be reimbursed for the amounts you paid. (Don't write to the agent or salesperson, since they can only work under the broker--unless, of course, the agent you worked with was the broker.) Ask for a written reply. Feel free to inform them that if you aren't satisfied with their reply then you have been advised by another real estate broker to file a complaint with the Michigan Department of Licensing and Regulatory Affairs. No one wants to get investigated, so maybe that will spur them to make good on your situation.

If they don't come through, DO file a complaint to:

MI Dept of Licensing and Regulatory Affairs
Bureau of Commercial Services - Enforcement Division
P.O. Box 30018
Lansing, MI 48909

Their phone number is: 517-241-9202

Before you write your letter to the real estate broker, make sure to review the complaint form at:
www.dleg.state.mi.us/bcsc/forms/enf/lce-992.pdf
You might actually want to fully complete the complaint form first, so that you know what is pertinent information when you write to the broker.

Please follow through so they don't continue to do this to others...and maybe you'll even get some money back. Best wishes.

[kimba01]

Thank you for your responses. I am still disgruntled about it and I did draft a letter to the broker. I just didn't send it and now I wonder if it is too late, although I have not even received any closing papers. I am not sure if I even get any as the seller, but I would think that I would.

You're right. I think I will send that letter tomorrow. I don't really want any repercussions from the crazy SS guy though. But, I agree that this should be addressed so he doesn't do the same to any one else.

[jackmichigan]

You didn't receive a closing statement?! By law, the broker is required to provide detailed closing statements to both the buyer and seller. Michigan's state law and administrative rules are clearly spelled out in the Real Estate Law Book (also known as "The Red Book"). Below is the excerpt regarding closings:

[SIZE=2][SIZE=2][LEFT]R 339.22311 Closing transactions.[/LEFT]
[/SIZE][/SIZE][SIZE=2][SIZE=2][LEFT]Rule 311. (1) The broker or associate broker who is involved at the
closing of a real estate or business opportunity transaction shall furnish,
or cause to be furnished, to the buyer and seller, a complete and detailed
closing statement signed by the broker or associate broker showing each
party all receipts and disbursements affecting that party. If the closing is
conducted at a regulated depository institution, a title company, or other
closing entity, the broker or associate broker is still responsible for the
content of the closing statement and shall sign the final closing
document.[/LEFT]
[/SIZE][/SIZE]
Make sure to include this failure in your complaint to the state. This is a serious breach of duty on their part. Given the circumstances, you might also want to contact a free Legal Aid Society, or similar entity, to see if they might provide free ("pro bono") legal services to assist you in your complaint. A Google search for "Michigan Red Book" will provide a link to a copy of the Real Estate Law Book--which would be a help to any attorney who might assist you.

Again, I would recommend that you fill out a complaint form prior to sending a letter to the broker--primarily so that you'll know what information the state will be looking for. Since the broker didn't even provide you with a Closing Statement, I think they should be interested in looking into this. Good luck!

[ufkenmill]

definitely send the letter to the broker, you were wronged and they owe you money from what is sounds like on the surface. you've got nothing to lose to fight it, they already have your money, time for you to get it back if you can.