Do Sellers Pay Short Sale Commissions?

A veteran short sale expert in Charlotte NC and short sale expert in Concord NC, Leigh Brown weighs in on a big short sale question:

Who pays the real estate agent commissions in a short sale?

In a regular real estate transaction, it is the seller who pays the commissions both for the buyer’s and seller’s agents. This happens because the seller is presumably profiting from his or her sale, which means there is cash available to pay the commissions.

However, in a short sale scenario, the lender has agreed to allow the seller to sell the home for less than is still owing on the mortgage. That means that, except for occasional financial incentives offered to the seller, the seller will not end up with any funds from his or her sale.

In other words, the seller doesn’t have the cash laying around to pay the Realtors – so is he or she still on the hook for that money?

The answer is no. Lenders are typically responsible for paying buyer’s and seller’s real estate agent commissions, not the actual home seller.

Banks and agents understand that if you are selling your home as a short sale, it’s likely because you can no longer afford the significant financial burden, month in and month out. The bank has already agreed to take a loss on a short sale and they take the fees owed to the real estate agents into account when they calculate how much money they require to short sell the property.

They main benefit of a short sale for sellers is getting rid of the financial stress and minimizing the damage to the sellers’ credit reports. Sometimes sellers will also receive a financial incentive from their lenders in order to go through with a short sale, as well. Depending on the lender, this amount could be in the tens of thousands of dollars.

If you’d like to learn more about buying and selling short sales in Charlotte or neighboring areas, please contact Leigh Brown, your short sale expert in Charlotte and short sale expert in Concord.