In a Short Sale, the Bank will allow for some closing costs to be paid for the homeowner, but not the purchaser.

The rules are different when dealing with a Short Sale.  The bank ultimately decides what will be paid for by the Seller at closing.  It is very crucial to know what the bank will and will not accept at closing so that the contract may be negotiated correctly in the beginning.

As part of the Short Sale or Pre-Foreclosure Program, the Short Sale lender will cover most all of the closing costs on behalf of the homeowners, as well as the real estate commissions.  Most lenders pay a total of 6% in agent commissions, however, there are a few that pay less.  This means that the homeowner will not have to pay the commission.  There are a few closing costs that the lender will not cover on behalf of the Seller, such as the cost of a home warranty if requested by the Buyer,  HOA transfer fees and certificates, and any delinquent HOA dues.  If the bank is offering Seller Incentive, the Incentive can be used to cover any costs that the bank will not.  If the bank is not offering a Seller Incentive, the homeowner will have to take care of these expenses prior to closing,  The bank will usually cover any delinquent taxes on behalf of the homeowner, as long as the sales proceeds are sufficient to cover then.  Remember, if there are any delinquent taxes, the List Price will have to reflect these costs that will have to be deducted from the Sale Price at closing, 

The Short Sale lender will absolutely, under no circumstances, cover ANY closing costs on behalf of the Buyer.  There will likely be something you will have to explain over and over to Buyer’s Agent, and you should expect them to argue with you incessantly.  What they will typically want to do for their Buyers is just gross-up the Sales Price on their client’s offer so that they can roll-in the Buyer’s closing costs.  In a Short Sale, the Seller’s lender will not allow this, the lenders will absolutely make no exceptions.  The bank’s position is that if they are going to take a hit on the Short Sale, and therefore the Buyer is going to walk into this property with some equity, they are certainly not going to contribute to any of the Buyer’s closing costs, no exceptions, The Short Sale lender also will not allow the Seller to contribute any monies on behalf of the Buyer,  The lender’s position on this is that if the Seller had any monies on hand to contribute to the Buyer’s closing costs, the Seller should have used that money to make their house payments. 

If you are considering a Short Sale to avoid foreclosure, dont’ delay.  Time is critical.  Visit www.AvoidBankForeclosureNow.com or call Bonnie Mullinax at 770.606.0054 to get started. 

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