Short sale question: In a short sale, who pays the commissions?

Asked by Mike J, Redwood City, CA Wed Dec 4, 2013

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13
Pacita Dimac…, Agent, Oakland, CA
Wed Dec 4, 2013
Generally, the short sale lender covers this expense --- but the short sale lender must approve the price, terms and conditions based on what the investor guidelines.

Some loans -- Fannie Mae and Freddie Mac --- are not permitted to reduce the agreed upon sales commissions. Others may not be so lucky.

Since you identify yourself as the buyer, this may not be your concern. What you should be concerned about is if you are asked to make a contribution towards the short sale if what the short sale lender approves is higher than your purchase price. The easiest solution to meeting that approved price is to raise the offer, or negotiate again and try to meet the lender's price somewhere in between.

Good luck!
2 votes
Matthew Smith, Agent, Oakland, CA
Wed Dec 4, 2013
The seller is the one who contracts to pay the commission, as per the listing agreement or separate commission agreement. In some cases (not GSE-sponsored loans), the lender may reduce them to mitigate their losses in a short sale situation as a condition for their approval.
1 vote
JoAnn Wheeler, Agent, San Ramon, CA
Wed Dec 4, 2013
The Selling side. The bank who holds the loan.

JoAnn
1 vote
allan erps,A…, Agent, Pearl River, NY
Wed Dec 4, 2013
The Selling side(Bank/Negotiator/Investor) pays the Realtors & Attorneys
1 vote
Cindy Davis, Agent, San Diego, CA
Wed Dec 4, 2013
This will come out of the seller's side of the deal.
1 vote
Thomas Moser, Agent, East Northport, NY
Wed Dec 4, 2013
As in any real estate sale, the seller pays the commission from the procedes of the sale. However, since it a short sale, the bank must approve it. They will not allow a commission that they feel is excessive.
1 vote
Kevin and Ju…, Agent, Wildomar, CA
Tue Jan 14, 2014
The Seller pays the commission per the listing agreement. In a short sale, the seller's lien holder (bank) must agree to reduce the amount they are owed in order to pay all seller side closing costs, including commissions. In essence, the bank pays the commissions since there is no profit for the Seller.
0 votes
Carolyn Davi…, Agent, Danville, VA
Tue Jan 14, 2014
The seller pays it from the proceeds of a sale. What happens is the bank agrees to take less than what you owe, the real estate agent sends in a calculation of expenses including commission, home owner dues, property taxes owed, Title transfer fees etc. The offer or estimate of what the sale price will be then has those expenses including commission subtracted from the sales price and the bank has to approve the remaining amount as acceptable to pay off their loan. That is where "short" in short sale comes from. Let me know if you need help.
0 votes
Ali Qureshi, Agent, Pleasanton, CA
Sat Dec 28, 2013
Hi Mike,

In a short sale commissions are paid by the seller which in this case is the bank.
0 votes
Donisia Marq…, Agent, San Ramon, CA
Sat Dec 28, 2013
In a short sale the lender pays the real estate commission for both the buyer's agent and listing agent. The seller will be the bank.
Realtor - Donisia
http http://:www.donisiaknight.com" target="_blank" rel="nofollow">http:// http://:www.donisiaknight.com
925-519-4404
0 votes
JR Thrasher, Agent, San Diego, CA
Thu Dec 5, 2013
Generally the seller. Why do you ask?

J.R. Thrasher
http://www.SanDiegoRealEstateVeterans.com
619-929-0105
0 votes
Randall Ortiz, Agent, Sacramento, CA
Wed Dec 4, 2013
The sellers will pay the commissions, and in a short sale the seller would be the bank.
0 votes
Barbara Wils…, Agent, Danville, CA
Wed Dec 4, 2013
The buyer or the bank, however you want to see it. The buyer brings money to the table in the form of down payment and loan. The commissions are subtracted from the money brought in, along with subtractions for unpaid property taxes, payments to the 2nd loan if any, and possibly a small payment to the seller. Why do you ask? What difference does it make when it all comes out of the purchase price that the bank has to approve?
0 votes
Do not confuse the conversation by asserting that the buyer pays the commission. That is a fatuous claim made by those who believe that the only function of a real estate agent is to inflate the cost of a property by adding on a commission to the “true” cost of the property.
Flag Wed Dec 4, 2013
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