Is cost of short sale negotiator kosher?

[Dannielle Spencer]

Hi all, 

I'm not that familiar with the short sale process as I haven't done one yet.  However, my father-in-law is moving and he is interested in buying a short sale in Albany, New York as his primary residence.  

The home is owned by a friend of a friend and the mortgage isn't underwater yet, but the friend's friend lost his job and will not be able to afford to make payments so the bank has let him put the house up as a short sale before going through the foreclosure process.  

In any event, I'm not entirely impressed with the real estate agent my father-in-law is using.  Among other things, she recently sent him a short sale contract to sign (I'm not sure on specifics as I haven't seen the contract yet) + a bill for $4K for the negotiator.  That bill seems a little steep to me.  That's a little over 3% of the cost of the home ($125K).

And I'm wondering if that amount is normal?  I've seen some mixed reviews elsewhere on the internet saying that I might not even need a negotiator.  I'm also wondering if it's not a normal cost but I do need a negotiator, can I go out and find and use my own negotiator?  I'd greatly appreciate any advice on this, especially from those of you who do short sales on the regular.  Thanks!