Who pays for closing costs on short sale? What's the latest point in the short sale process does the client get back their earnest money?

Asked by J, San Diego County, CA Sat Feb 20, 2010

Who usually pays for closing costs on short sale? At what point of the process can you back out and still get your earnest money back? I have my thoughts but I don't have any short sale experience and would like to hear from those that are. Thanks in advance!

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Gerard Dunn, Agent, Chevy Chase, MD
Sat Feb 20, 2010
BEST ANSWER
A short sale contract is negotiated. The costs will be paid as stipulated by the final ratified contract. Often, a bank does not like to pay costs - and would prefer they are paid by the purchaser or current homeowner.

Check with your Broker to determine the best course of action in submitting an offer. They will have the expertise to advise you on the current market conditions in your specific area.
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Clayton Bonj…, Agent, Miramar Beach, FL
Sat Feb 20, 2010
I have represented many short sale buyers and I always ask for the seller/bank to pay doc stamps on the deed and title insurance. I have the buyer pay mortgage related expenses. This has worked very well for me and my buyers.

Clayton Bonjean, Broker, MBA, CDPE
Destin, FL Short Sale Buyer's Agent
1 vote
Clayton Bonj…, Agent, Miramar Beach, FL
Sat Feb 20, 2010
Regarding EMD, You should try to set all contract time lines to start upon lender acceptance and have a flexible inspection period that starts upon lender acceptance. Our Florida FAR/BAR contract has great inspection period language that is very buyer friendly. Your board should have a standard short sale addendum and yes ask your broker.

Also, avoid large deposits. We never offer more than a $1,000 deposit on a short sale.
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