who pays commission on a short sale?

[97guns]

i have a couple of short sale offers out right now and on one of the offers the bank holding the 1st mortgage has approved the sale and now i am awaiting approval of the 2nd holder. my realtor is on vacation and i wanted to find out who pays the commission on a short sale - is it the seller as it would be on standard home sale or would it be different on a short sale ?

[Discover Davis Homes]

Unless you have a written agreement with your agent otherwise, the seller typically pays the comission on short sales.

[ISellRiverview]

Actually, I believe in most short sales, the BANK pays the commission because the seller is assumed to have no money. Every short sale I've ever done was that way.

[Daniel Gaitan]

I agree with Liane, normally the bank pays the commission. That's why a short sale is subject to lender approval.

[Discover Davis Homes]

Technically the seller pays for the comission, the bank just gets less of the proceeds. In the "usual" short sale the seller doesn't pay out any money because he/she does not have any. The bank(s) could cut the agents' commission in order to get more money, so that is why it would be important to know exactly what agreement you and your agent have. That is why I said earlier it depends on that agreement but typically the commission is still expected to come from the sellers' side.

[DMG]

Out of the 14 short sales I have done this year including one just approved Friday last week the bank pays the commissions. BUT like said see what type of agreement you may have signed up for...

[Agent 007]

i have a couple of short sale offers out right now and on one of the offers the bank holding the 1st mortgage has approved the sale and now i am awaiting approval of the 2nd holder. my realtor is on vacation and i wanted to find out who pays the commission on a short sale - is it the seller as it would be on standard home sale or would it be different on a short sale ?

Liane is correct. The seller is still contracted as the listing agent's client, but typically the bank will pay all associated costs with the sale, including the commissions.

[tsteuwer]

Liane is correct. The seller really is the bank, so the bank would pay your commission. I've heard some really bad things regarding this though; like even if you have a listing agreement with the original seller, the bank can change the commission. I've heard this mainly happening with Countrywide.

Actually, I believe in most short sales, the BANK pays the commission because the seller is assumed to have no money. Every short sale I've ever done was that way.

[DMG]

I always put "subject to bank approval" in my short sale listing agreements anyway as the seller has no money that’s why it’s a short sale. If they had any money they would keep the house not take a loss plus more of a loss paying me to sell it so using those words really has them on the hook for nothing so in that respect it holds even more true that the bank pays. Now doing that, yes, one could argue that the listing agent has no real power then over what their commission rate is if the bank said they would not pay but I feel its worth that risk as again the seller does not have the money and really why would they pay me to sell a home that is gone anyway, its good money after bad.

I have yet had a bank go 1% below my asking rate but yes they always go down and sometimes ask you to go way down but they will negotiate as well.

[Discover Davis Homes]

Just to clarify, the seller is not the bank. The bank gives an approval for the seller to sell the property for less than what is owed, bank approval is a contingency of sale. It is just a matter of terminology not what actually happens. Without the approval the sale can not go through. The proceeds of the sale pay for the commission and related expenses of the transaction. The lender(s) get the remainder of the money. Commissions are part of the fees that negotiated with the bank in determining what amount the bank is going to get after the sale. The sale still takes place between a buyer and current owner of the property.