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Who Pays The Costs In A Short Sale?
IL – You may wonder why a sales contract says the seller pays for certain costs and yet the bank covers the costs. Here is how it works. The sales contract may have a certain clause say: “Seller to pay title and seller’s documentary stamp taxes.” How does the bank pay that cost if it says the seller is paying it? Click here to discover how other sellers successfully did a short sale and avoided foreclosure. In traditional real estate (non short sale), certain costs are normally paid by the seller and other costs by the buyer. For example, the seller doesn’t normally pay the buyer’s home inspector. In these cases, the seller is actually paying those costs. So sales contracts have always been written like that. On a short sale, the costs are paid by the seller on the closing statement. But, you aren’t paying them. Instead, they are being subtracted from the sales price. The short sale lender gets what remains after the costs are paid. For example. Sales price: $100,000. All costs paid by the seller: $9,000. Net to the short sale lender: $91,000. The short sale lender is actually paying these costs by simply accepting the lower ... more

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