florida shortsale - help! realtor is trying to pull a fast one (disclosure, 3%)

[lookingfordreamhome]

let me begin by saying "I" too am a licensed realtor but i don't specialize in shortsales or traditional sales. i respect the profession and ppl who behave professionally. which is why it BURNS ME that this idiot did this!!

i am the 'buyer' on a shortsale prop in weston, florida and after 8-month wait we recently got the bank acceptance letter. the title company prepares a prelim-HUD for me and i see several fees which look questionable. turns out the realtor snuck in a $3200 fee to HIMSELF under a vague company name when all along he said this fee was charged by the Title Company to compensate them for the shortsale processing.

title company says nope that they do not charge a fee to do all the work (continually calling the banks, submitting everything through equator, negotiating, etc).

bottom line: realtor never disclosed fee was for him or his company. but i signed an addendum agreeing to "pay x fee to 'vague company name' for shortsale processing service." (during numerous phone conversations he continually said it was for 'chris' at title company and all his hard work.)

p.s. did i also mention i gave up my 3% commission to compensate him for the time-intensive nature of shortsales? he didn't want the bank to reduce the 6% so he listed another agent in his office as buyer's agent on the contract and the bank approved his full 6% commission. but he is still so greedy he tries to stick it to me for an extra $3200?

so realtors what say you? i obviously don't want to pay it and emailed him a letter letting him have it. he has not replied yet.

i want to NAIL HIM TO THE WALL on sheer principle alone. i talked to this guy so many times and he lied to my face repeatedly. what do you think? what legal recourse do i have? file complaint against him with FREC and governing agency of mortgage brokers? (he has both licenses). is this a legal issue? an ethics violation? a criminal matter? any help would be appreciated.

[Broker Dave]

If you don't do any short sales or traditional what do you do? REO's?

I'm not going to commit on your dilemma as I only see one side of the story and one of the strangest I've read.

As a real estate agent your first place to go is your Broker and don't see where you've done this in your story timeline.

really, good luck

Broker Dave

[lookingfordreamhome]

Dave i work for a builder selling luxury condos. We deal mainly with foreigners who buy cash. When buying this shortsale i was completely dependant on the listing agent that classifies himself as a shortsale expert.
Of course you are going hear one side.. Im the one who is complaining and he hasnt responded to my email yesterday.
Im not sure this involves my broker since im not getting paid commissionon this deal nor acting in a licensed capacity in this deal. Im the buyer.

[volk2k]

If that company is an LLC or Corporation.... then you are not paying "him".

You signed an addendum saying that you would pay this company.

It sounds like he is in the clear.

Are YOU actually paying this fee out of your own pocket or is it coming out of the Short Sale proceeds...

[Laurie Matthias]

The bank is most likely the one who is paying the $3200 fee, not you, unless there's more to the story. And if you're not working in a realtor capacity then how is it you're giving up a commission? And why sign an addendum stating that you were?

[bbronston]

I could be wrong but I believe your agent had a duty to disclose his relationship to his own company no matter how the company was set up. Since he has the charge on the HUD I don't think it's a case of short sale fraud. If you have any doubt, call the Florida Department of Business Regulation, FREC, and the Florida Realtors (all contact info easily found by Google) and see what they tell you.

[Hobokenkitchen]

I feel for you.

We just had something similar happen. I have worked in real estate for years, but not active now. I have no short sale experience and have only sold condos and city houses - no big country/ suburban homes so we also decided to let the short sale 'expert' realtor represent us, with a very reduced referral fee. First of 7 purchases that I haven't represented us directly on... and of course it was a nightmare.

We are meant to close on our short sale tomorrow. I managed to get an early copy of the HUD and there is an $840 fee to the realtor's company to be paid by buyer (us) on top of the commission due from the seller/ short sale bank.

We had signed nothing saying we would pay any additional fees (there is no way I would agree to pay extra to anyone without knowing exactly what it was for), so I guess he thought he could sneak it in and we wouldn't notice?

I basically called the title company and said we were disputing the charge. Title company said to take it up with the realtor so I sent him a note on Friday copying in the title company saying that there had clearly been in error with the charge and could he remove it ASAP as we didn't want a mistake to hold up closing.

I guess the (albeit) mild threat of not closing worked, because I followed up a couple of hours later in another email copying in realtor and title co and the charge had been removed.

I loath things like this - it really is what gives all realtors a bad name.

When are you due to close? I wonder if it's worth telling him that you will be unable to close with the fee as it stands. The problem is that you signed an addendum saying you would pay all that extra cash. Over $3000 is a lot of money - where does the addendum say it is going? I think you are on shaky ground as he has it in writing that you will pay, but it depends on what the addendum says. How do you know it's to himself if it's under a different company name? Can you call the title co and have them explain to you what the charge is?

Good luck!

EDIT: I reread your OP - he said the company name was the title co and now the title co is saying it's not for them. Correct?
Then I would email a (business like, not angry) letter to both title company and the realtor stating that you were told additional charges were due the title company and that you will need a full accounting of where the $3200 is going before closing can take place and if it's for anything other than title charges as represented it will need to be removed.

Request the negotiator at the short sale bank's contact information in the same email.

I think it's your only chance. If you outright accuse them of fraud you will force them to take a stance and fight.

I too would want to nail them to the wall as to say a fee is for one thing and then it be for another is fraud. So sorry that this happened to you. I wouldn't have believed it, but the shady business practice I have witnessed these past few months have been astounding and now there is little that would surprise me!

[lookingfordreamhome]

Originally Posted by volk2k

If that company is an LLC or Corporation.... then you are not paying "him".

You signed an addendum saying that you would pay this company.

It sounds like he is in the clear.

Are YOU actually paying this fee out of your own pocket or is it coming out of the Short Sale proceeds...

i am supposed to pay the fee out of my pocket.

yes, i understand i signed it and that was my mistake. but i signed it under false pretenses. he intentionally set out to defraud me. i can recount numerous phone conversations (he was too smart to ever respond in writing) about the charge where i would ask, "does the title company include title insurance under this fee?" he'd respond with, "no, they do not." "can't i negotiate this fee with the title company?" i'd ask. "no, it is non-negotioable fee. it's what they charge to process the shortsale. look at how long and hard 'chris' (the negotiator) has worked on this file."

there were MANY many discussions about this fee. like when he told me to call him for updates instead of "chris" . I told him, "but why can't i call chris for regular updates? i'm paying $3200 to the title company for his services!" he'd skirt around it and say chris was very overworked.

am i screwed because i signed the agreement? i totally trusted this agent and i feel so deceived and bitter. i simply cannot believe that he would do something so dirty. when the processor at the title company told me this was not their fee, that they dont charge for shortsale processing i was left STUNNED!

[lookingfordreamhome]

Originally Posted by Hobokenkitchen

I basically called the title company and said we were disputing the charge. Title company said to take it up with the realtor so I sent him a note on Friday copying in the title company saying that there had clearly been in error with the charge and could he remove it ASAP as we didn't want a mistake to hold up closing.

I guess the (albeit) mild threat of not closing worked, because I followed up a couple of hours later in another email copying in realtor and title co and the charge had been removed.

I loath things like this - it really is what gives all realtors a bad name.

When are you due to close? I wonder if it's worth telling him that you will be unable to close with the fee as it stands. The problem is that you signed an addendum saying you would pay all that extra cash. Over $3000 is a lot of money - where does the addendum say it is going? I think you are on shaky ground as he has it in writing that you will pay, but it depends on what the addendum says. How do you know it's to himself if it's under a different company name? Can you call the title co and have them explain to you what the charge is?

Good luck!

EDIT: I reread your OP - he said the company name was the title co and now the title co is saying it's not for them. Correct?
Then I would email a (business like, not angry) letter to both title company and the realtor stating that you were told additional charges were due the title company and that you will need a full accounting of where the $3200 is going before closing can take place and if it's for anything other than title charges as represented it will need to be removed.

Request the negotiator at the short sale bank's contact information in the same email.

I think it's your only chance. If you outright accuse them of fraud you will force them to take a stance and fight.

HOBOKENKITCHEN, thanks for your help. your scenario does give me a few ideas. i'm glad your mild threat worked. i've been going back and forth on what the BEST tactic would be. 'best' being that i can still close this shortsale with the fee removed. threats and going full force against him? or a mild threat so he doesnt feel the need to take a stand and protect himself against fraud charges?? perhaps your way really is better.

yeah, my mistake on signing the addendum which was part of the P&S agreement. but i completely trusted the agent. since he knew i was an agent too i would have never believed he'd try something like this. can you imagine what he must do to the unsuspecting public?

on the addendum i signed it reads: "Buyer agrees to pay x to [vague company name, llc] for shortsale processsing services.
i signed it b/c he explained this is what the title company charges to process the shortsale.

the title company did INDEED do all the work. but they don't charge for it.

[lookingfordreamhome]

Originally Posted by bbronston

I could be wrong but I believe your agent had a duty to disclose his relationship to his own company no matter how the company was set up. Since he has the charge on the HUD I don't think it's a case of short sale fraud. If you have any doubt, call the Florida Department of Business Regulation, FREC, and the Florida Realtors (all contact info easily found by Google) and see what they tell you.

you bring up a good point. i remember in all our licensing courses that it's always said that full disclosure is what's needed to avoid any issues. clearly he not only disclose but during 7 months he mislead me as to the purpose of this fee and mainly to whom the fee was paid.