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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Bill Wootan's…, , Waldorf, MD
Fri Mar 7, 2008
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
2 votes
Reed Stupals…, Agent, Bel Air, MD
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!
2 votes
Mike Linkena…, Agent, Jacksonville, FL
Fri Mar 2, 2012
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:

1 vote
Mike Linkena…, Agent, Jacksonville, FL
Fri Mar 2, 2012
The lenders typically pay ALL costs. Talk to a local short sale specialist for no cost assistance -
1 vote
Kevin Vitali, Agent, Tewksbury, MA
Mon Feb 27, 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.


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,
1 vote
Fernando Her…, Agent, Gaithersburg, MD
Thu Aug 19, 2010
Neither, The Lender in first position pays the Realtor's fees. First position meaning that they hold the first trust on the mortgage.
1 vote
renee dumont, Other Pro, Worcester, MA
Wed Jul 14, 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
1 vote
Mike Linkena…, Agent, Jacksonville, FL
Mon Feb 22, 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:
1 vote
Fernando Her…, Agent, Gaithersburg, MD
Wed Jul 9, 2008
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
1 vote
Evan Musikan…, , Arizona/California
Fri Mar 7, 2008

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
480-483-6014 FAX
Web Reference:  http://www.musikantow.com
1 vote
Also, the return amount to the realtor was 6700.00 minus 1000.00 because the attorney felt bad about what happened. LD Michael.
Flag Wed May 4, 2016
We sold our house in a short sale. The realtor split a 4% commission with the buyers realtor. We signed the agreement with our realtor giving them 6%. We received a hafa of $10,000, on the day of the closing, our attorney who was recommended by the realtor, told me that we had to return 2% of the 10,000 back to the realtor to make up their 6%, which is not what happened, given they split the 4% commission with the buyers realtor, which gave them only 4%. I contacted my mortgage company, and they said that the realtor signed off on the 4% split, and they were not to take any part of the 10,000, and that it was meant for us, the seller. What can we do to get this money back from the realtor.. Lois D. Michael ldmichael60@gmail.com
Flag Wed May 4, 2016
Pam Winterba…, Agent, Danville, VA
Fri Mar 7, 2008

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.
1 vote
Deborah Madey, Agent, Brick, NJ
Fri Mar 7, 2008
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.
1 vote
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