Joshua Jarvis

Recently a court case ruling about Administrative Fees (Busby v. JRHBW Realty, Inc, d/b/a RealtySouth) made me think, "Good for them!" I've never been a proponent of Admin Fees. They are junk fees after all. However, as a short sale specialist, I had to think about this a bit more.

In this case, the plaintiff won a class action law suit against RealtySouth for charging Admin Fees that were legally proven not to have done anything to help in the transaction. Short Sales can feel like the wild west and now some of the extra ways of collecting a full commission are in jeopardy.

Let's look at Section 8 of Respa (since it was used in this court case)

"No person shall give & no person shall accept any portion, split or percentage of any charge made or received fro the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed."

While RESPA allows for fees to be paid with cooperative brokers, the plaintiffs in the above case argued that the admin fee charged was not for services actually performed. This got me to thinking about Short Sales. I've got some key areas where there is potential grey area, especially if the seller of a short sale has to take a note back (liability!).

• Negotiations - You might be doing this or outsourcing it, are you collecting the fee for it? Might be best to outsource or at least have it go to someone other than your Broker or personal business.
  
• Extra Fees - Did you pad the HUD to allow for you to cover HOA, taxes, etc. Now that the deal is approved you want to pocket the extra money. After all you earned it, Short Sales are tough! Now with this case, any fee could be questioned at a later date. (Not suggesting that padding the HUD is right or wrong, just a practice that I have seen)
  

Ultimately, it's better to try to charge a higher (but not exhorbinant) commission % than it is to add fees onto the HUD needlessly.

Luckily, most sellers and buyers are extremely happy when the short sale process is complete, but it does bare paying attention to!

Article over your head? If so, feel free to contact me with referrals! (I LOVE SHORT SALE REFERRALS!) or questions!

Join Us For This Type of Discussion on ShortSalePros!

Sometimes you hear a message that just changes your perspective so much so that you need to share it with someone. For those that are curious, I am a Christian, and the message of Jesus' Love is definitely worth hearing, but that's not what I am talking about here. I did hear this message as a sermon, but it transcends a good Sunday message, so much so that I felt it was worth blogging about it in an area that Realtors and consumers both could read.

First, some background on my week. I'm working on a big announcement about being a RichLife Advisor. Basically, by aligning myself with the RichLife organization, I'll holding myself to a standard that says that my prorities are:

1. God
2. Family
3. YOUR FAMILY
4. Business

You'll notice that YOUR Family jumped up to number 3. I've always practiced my business this way, but now I'm just formalizing it.

In addition, my Operating Principal (the owner of my Franchise) handed me a book called, "Noticer" that has helped me look at the bright side of things even when things are down.

So I am pumped up about life and real estate most of time, but it's still a struggle.

Fast forward to Sunday. Our Church, Victory World Church is part of an 1800 Church unification project to have one prayer. This week's message is God is... UNLIMITED. (Those of you who are non-Christians, continue on). There's several things that he went into about how we have dominion over sin and can perform the works of Jesus.

He ended with the story of a young man diagnosed with Polio who could not walk. His Mother would place him in a box and push him around the home. As she kept him with him, they would listen to Christian talk radio. As he grew up he heard messages about faith and overcoming odds and how God heals. He eventually had enough faith and began to rock the box until he fell out. The first few times his Mother would scold him and then put him back into the box. One day his mother left for a quick errand and he was able to rock himself out of the box. He started to climb up some furniture to try and stand while a small voice said, "Keep Going." He was standing up when his Mother walked in, shocked. The man later became a successful business man.

Finally, Pastor Dennis Rouse closed with another story that I think we've all been waiting for.

He brought out a jar of crickets with the lid on. He began to talk about how people act when they drive a convertible. They put the top down and they begin to smile and play music and really enjoy themselves and that is like our life. Most of us in the Real Estate industry are driving around with the top up on a sunny day.

He then showed the crickets again and took the top off of the jar. Not one cricket jumped out. In fact, they not only had learned that there is no escape, but they had learned not to try. In addition, many of the other crickets would pull down the cricket getting to the top of the perch.

That's a lot like small business owners right now. Sure it is tough, sure you will hit your head trying to make it, but the lid isn't always on the jar and you don't have to LIVE like it is.

If you're reading this than you are on the internet. No doubt you have seen the multitude of real estate websites such as Realtor.com, Trulia, Zillow and others. Although, Realtor.com is "OUR" site they still believe the same thing that all the other sites believe, including Active Rain, and that is, that the information should be available and free and easy for consumers to get a hold of.

Some go further and even suggest that there might not need to be a Realtor, after all, you can get all the data you want on the internet.

I truly love this!

I find it ironic that most of these companies have high "worth" but are struggling to monetize all that data. Why should Realtors pay. It's our time and effort that goes into getting the listing and putting on the MLS so that Zillow and many other can grab it and try to remove us from the picture only to have turn around and pay them for it again.

I have three words for companies that want me to pay for this: L O L

I think it's hilarious, so much so, let's run through it one more time.

"So you are telling me that you have taken my data and generated interest in it and now you want to sell it back to me."

There's not enough money at any of these companies to beat a great agent in the hyper local arena. Sure, I'm going to play the game, my seller's property will definitely be on these sites, I'll answer the questions, I'll link back to my site.

However, they won't be getting money from me until the actually bring real (not stolen or borrowed) value to the table for me or my clients.

Guest blogger: Beau Henderson, with Fiduciary Capital:

When cash values are insecure, real estate is a smart place to put your money. If you don’t own a home, that’s the perfect place to start. Buy the best house you can afford—and the “afford” part is critical. Particularly when you are buying a home at least partially as an inflation hedge, it might be tempting to invest as much money as possible into your new home, i.e. buy the most expensive house you can manage. However, be sure to take into consideration your income, your debt, your savings and – most importantly – your spending habits. It’s only smart to invest in a house that that will hold or gain value, and foreclosure tends to have a negative effect on that. So, especially during times of layoffs, a good rule of thumb is to make sure you’ve got the financial reserves to keep you afloat in case of a sudden emergency or job loss.

One of the best parts of home ownership is the mortgage tax deduction, which, depending on your tax bracket, can reduce your effective mortgage expenditures by as much as 30 cents on the dollar. Also, if possible, get a fixed rate mortgage. That means that no matter how long you live in the house, if you don’t refinance, your housing expenses will remain the same. And the best part: while housing prices can rise and fall, as they’ve recently demonstrated, housing investments are overwhelmingly stable. Over time—and that’s key, the long term part— the value of houses almost always keeps up with inflation and generally exceeds it, and every mortgage payment you make is like putting money in your savings account.

Of course, buying the right house in the right place is important in making a sound investment. Before going after that house, find yourself a savvy real estate agent and broker who have the knowledge and skills to guide you toward the best possible investment.

Beau Henderson is a certified senior financial planner and a authorize 1031 Intermediary. His office is in Gainesville and he can be reached at 770-540-9142.

With eight years’ experience shaping the financial futures of more than 2,000 clients, Beau Henderson combines an expert knowledge of the industry with an exclusive understanding of the market. And that’s a winning combination for your investment strategy.

A Forsyth County native and graduate of the University of Georgia, Beau majored in finance and psychology. After spending two years as a Regions Bank loan officer, Beau felt drawn to financial planning, a career that would allow him to use his expertise to help his clients toward lifelong financial security and success. A Registered Financial Consultant, Beau is currently Vice President of Financial Planning and Senior Financial Advisor with Fiduciary Capital based in Gainesville, Ga.

I've been creating videos of my short sales to help dispell the myth that short sales need work.  This short sale in Powder Springs is a great example of a home that is move in ready.  Also check out the cool video technology!