Over the past few weeks, we've heard a number of stories from brokers who've had their short sales held hostage by third-party negotiators.   Here are a few cautionary tales:

The listing agent contracted with a third-party negotiator who typically gets paid out of closing costs (1.5% of the purchase price).  However, in this case, the bank was not willing to pay buyer's closing costs.  The buyer did not have an additional $7,200 in cash to bring to closing.  The listing agent was willing to kick in 1% and requested that their negotiator take 1% instead of 1.5%.  The negotiator refused to complete the sale without being paid the full 1.5%. The transaction is currently unresolved.

Case #2:

A law firm negotiating a short sale neglected to have the listing agent or seller sign a services contract, leaving it unclear who was responsible for paying their 1% fee. Once the short sale was approved, the firm asked the listing broker to pay the fee of $3,100 and threatened to not allow closing until they were paid. A solution is still being negotiated.