If there's no equity in the home, how do realtors get paid in a short sale?
You know what my favorite part of every short sale appointment is? It's when the seller asks me what my services will cost them, and I get to tell them...DON'T WORRY ABOUT IT!
Nearly 100% of the time short sellers have no out of pocket costs in a short sale! Closing costs are paid out of the proceeds of the sale.
How does that work?
There are actually several costs due from a sale of any Connecticut property:
- Realtor commissions
- Conveyance taxes
- Adjusted real estate taxes
- Legal fees
- Seller paid concessions to the buyer
- Junior lien payoffs
- Recording, wire, courier fees etc.
In a "normal sale," these come out of the proceeds of the sale property and are a loss to the seller.
In a short sale, there are no proceeds to the seller. However, lenders understand that there are customary costs to selling the property, including all the fees above. Lenders allow these costs to be deducted from the proceeds of the sale and, in fact, collect the "net" proceeds - what is left afterwards.
So what does that mean to the sellers?
Well, it means that although these costs were paid for out of their home sale, the sellers didn't actually pay any of these costs out of pocket!
The only time sellers pay anything at closing is in instances where the lender requires a cash contribution in order to approve the short sale... or in instances where there are junior liens or judgement liens that won't be covered by the sale.
Isn't that beautiful? I get to sell my clients homes, get them out of their massive mortgage debt, and nothing I did cost them a single cent out of pocket! Talk about happy clients!
I cannot honestly find the right words to express the amazing job that Minna, Jaime, and the entire group did for me. Making the decision to go through a short sale process is daunting, to say the least, but Minna and her team somehow found a way to take all of the stress out of it.
From taking time during our initial conversation to explain all of the possibilities to seamlessly navigating through all the hoops with the lender, every step of the process was masterfully covered. From our initial conversation to closing was about a five month process in total, something I consider a minor miracle considering I didn't think I would ever be able to find a buyer for the property!
Overall, I could not be happier with my experience. To anyone looking for real estate expertise, whether it be standard or short sale, I would say that there is Reid Real Estate Group and then there is everybody else!
Last Updated on May 18, 2021 by Minna Reid