Can I Afford Your Services? How is my Agent Paid in an Orange County Short Sale?

By
Real Estate Agent with Donovan Blatt Realty 01267479

Can I Afford Your Services?  How is my Agent Paid in an Orange County Short Sale?

 

In a typical equity sale, the seller signs an agreement to pay a commission to the listing agent, and the listing agent then shares this commission with the buyer's agent.

When I meet with sellers who are considering a short sale, which occurs when they owe more on their home than it is worth, they are concerned that they will have to pay an agent commission.  Most can't afford to make their mortgage payments and do not know how they will pay a commission.

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I explain to them that any offers they accept will be conditional upon their lender's agreement to pay some or all of the closing costs that are typically paid by a seller as part of the short sale agreement.

Costs that May Be Paid by a Short Sale Seller's Lender

  • Agents' commission
  • Contribution to second mortgage
  • Escrow fees
  • Title insurance policy
  • Seller contribution to buyers' closing costs
  • Termite repair
  • Hazard disclosures
  • Home warranty
  • Seller moving costs
  • Messenger fees
  • Notary fees
  • Past due real property taxes
  • Past due home owner's association dues
  • County tax stamps
  • Miscellaneous fees

Not all lenders will pay all of these costs on a short sale.  Some will cut the costs entirely or pay some percentage of them.

Part of the negotiation with the lender will be what costs will be paid and what costs won't be. 

In general, most short sale lenders will agree to the following if they agree to a short sale:

  • Agents' commission (may be reduced)
  • Contribution to second mortgage (often a few thousand dollars; sometimes more)
  • Escrow fees
  • Title insurance
  • Hazard disclosures
  • Messenger fees
  • Notary fees
  • Past due real property taxes
  • Past due association dues (may pay a portion)
  • County tax stamps

 

Different lenders have different requirements and different items they will agree to pay from the proceeds of the purchase price.  What a lender will agree to on a short sale often depends upon who the final investor is as many lenders are actually servicing companies for the final investor.

If you believe you need to do a short sale on your home, but are concerned about having to pay many of the typical fees, please contact me at 714.319.9751 to discuss your options.

 

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? For more information see Options to Foreclosures, understanding short sales or contact me at christine@donovanblatt.com to discuss your options.

If you want to buy a home or to list your property for sale, please click Newport Beach homes, Costa Mesa homes, Huntington Beach homes or Orange County homes.  Click the link if you are interested in buying a home at a courthouse auction sale.

Contact me at christine@donovanblatt.com or 714-319-9751 to learn about her system which will make your buying and selling experience easier.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

Click Orange County homes for sale to view all OC homes for sale.

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Rainer
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Not a real person
San Diego, CA

Just when you think you know how a bank works, they change because their investor changed. It can be an aggravating process.

Mar 01, 2010 07:19 PM #1
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Russel - It is an aggravating process for all parties involved.

Mar 07, 2010 02:37 AM #2
Rainmaker
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Jared Hokanson
Hokanson Realty & Jared Realty Group - Medford, OR
Your Home Sold, GUARANTEED!*

Christine - Great answers to the short sale questions that people often are afraid to ask, also one of the beautiful things about short sales is that most sellers don't have to come up with anything out of pocket to pay their agent, their lender takes care of it.

Mar 15, 2010 01:21 PM #3
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Jared - This is one of the "advantages" of a short sale.  Unfortunately, I'm coming across more lenders and MI companies asking for contributions from people who can't make them.  It's just more negotiations.

Mar 15, 2010 03:33 PM #4
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