Who pays the real estate commission on a short sale?
Often when a homeowner enters into a short sale decision because they have used up all their financial resources. They do not want to have their home foreclosed on because of the long term damage to their credit.
The home owner then decides to explore a short sale, but if they list their house for sale, who pays to real estate commission on a short sale deal? There is no equity in their home, and no cash in the bank?
The first mortgage lien holder is the one who actually pays the real estate commission. How?
The first mortgage holder has priority over all lien holders except unpaid property taxes. The mortgage holder agrees to allow the real estate commission to be paid from their gross proceeds. Therefore even though the seller and the listing agent agree on a commission fee, it is ultimately the first mortgage holder who actually allows the commission to be paid on a short sale.
The amount of comission to be paid is unually written in the letter of short sale approval and is a term of the short sale approval.
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