Scott,

All the fees in a short sale are covered by the lender. You can visit http://www.HopeForIdaho.com to find out more about the short sale and foreclosure process in Idaho. If you have further questions feel free to contact me directly. We do a large volume of short sales in the valley for our clients and have a very high success rate.

In many cases we're able to get the lenders to release our sellers outright without any further money owed. Great question and thank you for posting it.

Scott,

First, to answer your question, Robin is right. The commission and all other costs of selling come out of the bank's side. Of course, there are some who would say that if the commission weren't there because no agent was involved, the bank would be more likely to accept an offer because there was no commission to pay in the first place. This thinking is a little backwards, EVEN from the bank's perspective. Unlike people who don't think agents are necessary, are paid too much, do nothing, and only care about their commissions, etc; the banks understand the importance of an agent. The banks know that a property listed with an agent will invariably have more buyer traffic, thereby increasing competition for it and producing a higher eventual sales price. Not value! Price. That's the bottom line that the bank considers. Statistics show that homes sold through a good agent bring a higher sales price which more than compensates for the average commission charged.

Here's my bigger concern for you. You indicated that this is a rental property. Are you sure you'll qualify for a short sale? If you have other assets, the bank may not approve YOU for a short sale. They could approve the property but not the seller. Do you own the home in which you live? How much equity do you have in it? Do you have liquid assets that would cover the loss? Many banks scrutinize the details of a short-sale-approval request when the property is a second home or an investment property.

The first place you should go for information is your lender. You'll want to ask for their loss mitigation department. It may take some work to get to the right department or person within it. Persistence!

If you would like further information about short sales, please don't hesitate to contact me directly. I'd be happy to share my knowledge. Unfortunately, I've had to work a lot of short sales. Something else that the banks tend to favor are attorneys working in advance for a short sale. I work with an attorney who builds his cost into the transaction right from the start. The bank would prefer to talk with an attorney than a real estate agent. While the bank understands and appreciates the importance of an agent for marketing and negotiating, they would rather COMMUNICATE with an attorney. The attorney will be going to the agent to prepare a BPO (broker price opinion) or some other opinion of value format because the attorney is not a specialist on market values and trends. The attorney is the legal specialist. As with anything else, you get what you pay for...and paying each person for his/her is crucial.

I hope this helps. If you would also like help in finding a good agent in your area who specializes in short sales, let me know. Through my relocation network, I have access to the best agents and can search them by short sale experience. This service is free to you but can be very valuable.

When you short sale any property, the real estate commission is presented to the lender as a deduction from the bottom line that is being negotiating with them. Most lenders allow between 5 - 6% for the realtors to split for the transaction. In many cases, there is no out of pocket at all for the seller when the lender accepts the short sale. However, be aware, that in some cases the mortgage insurance may ask for some compensation from you towards the loss. Often as an unsecured note that is paid over several years.

I work on a team that specializes in short sales. If you have any questions about the process or if you would like to look into our services - please don't hesitate to contact us.

I have attached our website below.

The Bank pays the commission and that will be included in their decision making process as to whether or not to accept the offer.