Home Buying in Maryland>Question Details

Curt, Both Buyer and Seller in MD/FL

Who pays the realtor fees in a short sell? The Mortgage Company or the Buyer?

Asked by Curt, MD/FL Fri Mar 7, 2008

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I work through a company that specializes in short sales, and they negotiate with the mortgage company/bank to pay fair commissions to realtors! They (16 of the largest lenders in the US) asked us at meeting what they (the banks, etc) could do to move more short sale properties, and we answered ; "Only two things are needed, fair commissions and speed in responding". It seems their biggest problem is agents that do not send in ALL the required documents, like proof of funds to close. Remember, short sale properties are sold "as is" and they will not accept a bunch of conditions - if the agent is on his toes, and knows how to package an offer, it is not unusual that we get a 1-2 day turnaround, when it used to take us 4-8 weeks!
The reason agents are requesting the buyers to pay part of the commission is because the banks/mortgage companies cut the commissions way down, and it takes so long to get to closing!

Good Luck...

Bill Wootan
Web Reference: http://ww.billwootan.com
1 vote Thank Flag Link Fri Mar 7, 2008
Short sales are very tricky. It ultimately depends on the bank, if you are a buyer for a short sale property and you have signed a buyer agency agreement with your agent then you may be liable to pay a commission to your Realtor if the mortgage company does not. Make sure everything is agreed to up front including the commission with the bank. Best of luck!
1 vote Thank Flag Link Fri Mar 7, 2008
All traditional closing costs, including Realtor fees are typically paid for by your lender in a short sale! The only people or companies that charge homeowners a penny for short sales are those who are no successful at closing them and make a living off of FEES! Only choose an experienced Realtor to help! Check out:

http://www.short-sale-specialists.com
0 votes Thank Flag Link Fri Mar 2, 2012
The lenders typically pay ALL costs. Talk to a local short sale specialist for no cost assistance -
0 votes Thank Flag Link Fri Mar 2, 2012
Typically its the sellers responsibility to pay the fees associated with a sale of a home. In a short sale usually the home owner has no money to pay the fees. In general, all the fees associated with the sale that a seller would typically pays for is covered by the lien holder.

http://massachusettsshortsales.info/who-pays-all-the-fees-as…

A good short sale agent, will get the fees covered by the bank. As a Massachusetts Short Sale Agent, I have never had my commission rejected by the bank. Sometimes I have to take a reduced commission, but that goes with the territory,
0 votes Thank Flag Link Mon Feb 27, 2012
Neither, The Lender in first position pays the Realtor's fees. First position meaning that they hold the first trust on the mortgage.
0 votes Thank Flag Link Thu Aug 19, 2010
Hi Curt,

Always to Lender. That's it. Your are turning the house over to the bank and they in turn are choosing
to let you sell and move on with your life. The entire short sale process is FREE to the homeowner.

Best wishes to you!

Renee Dumont
0 votes Thank Flag Link Wed Jul 14, 2010
In a short sale, all traditional closing costs, including Realtor fees are typically paid for by your lender! The only companies or agents that charge homeowners a penny for short sales are those who are not successful at closing them and make a living off of FEES! Only choose an experienced Realtor to help, and NEVER pay for short sale services! This site is the best resource for short sale info:
0 votes Thank Flag Link Mon Feb 22, 2010
The Mortgage Company period.
When a seller is approved for a short sale. .he pays zero.
The Mortgage Holder has to agree to pay any fees associated with the sale of the property.
Fernando Herboso & Associates
Short Sales for Maryland DC and Virginia
Fernando@ReallyNiceHomes.com
0 votes Thank Flag Link Wed Jul 9, 2008
Curt;

You will be best served by engaging the most competent local real-estate professional who specializes in the particular geographic area of the short sale you are pursuing. A good agent will identify and secure their commission in the purchase agreement. The Buyer's agent usually has the advantage if they are experienced and is familiar with the market and REO guidelines. The Seller's agent typically is selling in volume with a 1.5% or so commission and desires to close easy clean transactions with well capitalized Buyers and very little due dilligence. If your agent isn't on top of their game, you should seek out an agent who knows the market, area, and appropriate REO proceedures if you expect to take advantage of the available deals. The Buyer is not usually required to pay the commission.

If you have any further questions, please feel free to contact us directly:

Evan Musikantow
Musikantow & Associates, LLC
Keller Williams Beverly Hills
439 N. Canon Drive Suite 300
Beverly Hills, California 90210
Russ Lyon Realty Scottsdale
7150 East Lincoln Drive
Scottsdale, Arizona 85253
800-989-8198
480-483-6014 FAX
http://www.musikantow.com
Web Reference: http://www.musikantow.com
0 votes Thank Flag Link Fri Mar 7, 2008
Curt.....

The commissions are factored in with the closing costs. The seller or the lender approving the short sale pay the commission and of course that dollar amount is usually negotiated at the time of approval.
0 votes Thank Flag Link Fri Mar 7, 2008
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
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Generally, the lender approves a short sale looking at all facts and figures for the transaction, and that includes the Realtor fees. It is common that the buyer has a buyer agency and commission agreement w/ the buyer agent. That document is included in the short sale package and factored as one of the line items in the transaction. It is paid from the proceeds of the sale.

The above is typical, but all transactions are negotiated individually and policies may vary by bank. Overall, banks want properties listed by Realtors before accepting a short sale, since that process provides an oppty for the highest price. A private sale, with a property that was not lsited will raise the question to a lender if the selling price is or is not reflective of what the open market could or woujld bring. Realtors bring the open market to the banks, credibility to the sale and therefore are deemed a necessary component in the short sale process.
0 votes Thank Flag Link Fri Mar 7, 2008
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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