I have seen agents charge Adm fees on their short sale listing or verbage similar to that. I just saw one stating "buyer will pay xyz realty an added commission of $495 at time of closing". Is this ethical or legal? There are a lot of questions out there in regards to agents charging these fees, they show 2.5% commissions so they are making up the rest with the buyer.

I just spoke to FAR legal dept (I'm in Florida) it's a violation of the Respa law. I thought so, so if I make lets see if they are willing to work with me or not.

Why do all the short sale scams start in Florida?

Many do not start here. They just get perfected here.

We had a rash of MLS listings from agents who have to pay a per transaction fee putting the commission as X% minus $YYY dollars.

This effectively shifted the fee from the listing agent to the selling agent. Our MLS does not allow this anymore and can fine and eventually ban an agent who does so.

I have to admit, Floridians are masters in this area.

It is the weather. We are a magnet for people who want to spend time on the beach.

Actually working a real job for a living cuts into their beach time.

If they spend the time, energy and creativity on something productive instead of scams they would probably make more money and have more beach time.

As long as it is on the HUD-1 it does not violate Respa

I lived in S.FL once and I remember even then it was very expensive to live there, BUT the pay was low b/c of something they called something like the "Sunshine" factor? That, if you live there you get the "benefits" of the beach and nice weather. Like you're LUCKY to have that, why ask for decent money, too? Wages were discounted for this "Sunshine Factor". So, I became a drug dealer to make ends meet!

Just kidding. Actually, I had to move or starve. But alcohol was really cheap-- is it still like that?

I lived in South Florida for 12 years. For a long time, the Ft. Lauderdale area was the "Home" of the scammers but many moved to Boca around the year 2000. These were mostly stock boiler room operations but there were plenty of other scams at the time.
Just the other day, there was an article in the Palm Beach Post about some guy that filed fraudulent quit claim deeds on vacant houses, then rented them out at less than market rates to gullible people. Most were in the same development that was featured in the reality series with Rob van Winkle (Vanilla Ice) where he fixed and flipped. When they were built around 2002 and 2003 they started at about a half million.

I think the fee has to be earned (some service has to be performed), it can't be tacked on because you want to increase your bottom line.

"Section 8: kickbacks, fee-splitting, unearned fees

Section 8 of RESPA prohibits anyone from giving or accepting a fee, kickback or anything of value ..... In addition, RESPA prohibits fee splitting and receiving unearned fees for services not actually performed."

It would be pretty hard to argue that a short sale negotiation wasn't earned if the escrow closed.

My issue(s) with this, are:

~These companies are not working for the the buyer. The buyer did not choose them/hire them. A buyer should never have to pay for a company/fee they have no control over.
~I would wouldn't swear to it in court, but would bet on it in Vegas that, these fees would not be allowed to be paid by a buyer on a VA or FHA loan. And how many of these loans are we seeing these days? Something like 30%?
~The way it's been worded in our MLS, the fees get pd by the buyer not as a commish, but as a negotiating fee to ABC short sale co for facilitating the "deal" or some such thing. Because only a licensed broker can earn a commish in Ohio.
~If an agent needs to hire a co to help get a short sale closed, THEY need to fork over the buck.

/off my soap box

I think that an agent that hires a short sale negotiator or charges some kind of fee, when it is charged to the buyer, is doing a great disservice to their seller.
The listing agent, via the listing agreement, is pledging to the seller to sell their property at the best price possible to a ready, willing and able buyer.
If a buyer balks at paying these "fees" and walks away from the transaction because of the additional fees, has the listing agent really provided the seller with the service that was contracted?

It does not violate section 8 of RESPA.... It's a line item on the HUD that discloses the service much like a legal fee, a transit fee, doc prep fee, etc..... The fee if minimal is no big deal

[quote=MountainBPO]It does not violate section 8 of RESPA.... It's a line item on the HUD that discloses the service much like a legal fee, a transit fee, doc prep fee, etc..... The fee if minimal is no big deal[/quote]

This was handled by HUD a few years back against RE/MAX franchisees who were adding fees to the HUD-1 saying the same thing...if it's on the HUD-1 it is legal. HUD stated that if you add a fee to the HUD-1 you must disclose the services that were provided and the parties must be given an opportunity to review and question it. I found this on Realtor.org:
http://www.realtor.org/rmodaily.nsf/0/c3d6746571c34365862576ef0051ca25?OpenDocument