As per contract for short sale, agent is asking for 6% commission, What happens to the difference from what I owed Vs sale price, do I owe to bank?

Asked by Uday, 48174 Mon Nov 28, 2011

I am exhausted from last two years, trying to refinance, now putting my house for short sale. Do I have to pay any thing to agent or bank? Housing market went down very much in our area and I think there is a lot of difference between what I owed and sale price of my house. Do I need to continue making payment on my house?

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Michael Cheng, Agent, San Jose, CA
Mon Nov 28, 2011
Abu is incorrect. In a short sale, the bank pays the agent's commission. Your main concern should be just getting the bank to approve your short sale. Work with a Realtor who has experience in handling such approvals.
Web Reference:  http://www.archershomes.com
1 vote
Tina Lam, Agent, San Jose, CA
Mon Nov 28, 2011
Uday,

Many of these questions are better directed toward your Realtor. As a matter of definition, the bank becomes the seller in a short sale. So, you need to work out with the bank if you need to make a contribution to the process. Otherwise, the bank pays for the agent's commission if the short sale is approved and a sale is closed. If you continue making payments, it certainly helps to get the bank to approve your short sale and allow the process to move quicker. Plus, you minimize the impact on your credit rating. Of course, whether you continue paying depends on your ability to pay as well.
Web Reference:  http://www.archershomes.com
1 vote
Karen Paytas, Agent, Clinton Twp, MI
Mon Nov 28, 2011
Hi!!

First make sure you work with an agent experienced in short sales. If this home is your primary residence there is a one time forgiveness in any deficiency judgement. There are numerous variations on which the lender can go on these. They can ask you to contribute to the short sale or they can accept or counter any submitted offer. The commission is usually paid by your lender. If you discontinue making payments on your home your lender can and most likely will foreclose on the property. The difficulty in doing a short sale mostly depends on your lender and the experience your Realtor has.

Good Luck,

Karen Paytas, GRI, CMS
Realtor
Real Living Kee Realty
586-709-8465
kpaytas@mirealsource.com
0 votes
Maureen Fran…, Agent, Birmingham, MI
Mon Nov 28, 2011
Uday,

There are a couple of issues you ask here.

First is what happens to the difference (called a deficiency) between what you owe and what is netted at the sale. That is negotiable. Some banks will forgive it and some won't. The bank can pursue the deficiency debt for many years after the sale, so it is something to ask about before you sign the final short sale papers. One of the biggest advantages of doing a short sale is knowing how the bank will deal with the deficiency. You might have to agree to pay something to the bank to get rid of the deficiency. That amount is negotiable.

Second, typically the bank approves the payment of the commission but you will want to confirm with your agent what happens if they don't or if they approve less than the amount you contracted to pay.

Third, not making payments has a very negative impact on your credit, if that is still an issue to you. If you are not able to make the payments, that is something different.

Fourth, I don't agree with Tina that the bank becomes the seller in a short sale. You are still the seller and you decide if the terms of the sale are acceptable to you before you let the bank make any decisions about the sale of YOUR home. In a short sale, the bank is determining if they agree how to deal with your shortfall between what is owed and what you can get for it. You will appear at the closing table, not the bank. The deed will be from you.

It's still a complicated process and it can be frustrating. Make sure you chose an agent who is experienced in short sales and can provide you with the assistance you need while you navigate this sale.

Good luck to you.
0 votes
Abu Musa, Agent, New York, NY
Mon Nov 28, 2011
Agent works for commission so you need to pay commission.If you have financial hardship your short sale will approved by lander.If you are able to pay the difference there will not be any short sale.
0 votes
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