Prescott Arizona Area Foreclosure News

Who's the Seller?

I’m working on a short sale listing and the homeowner is in the midst of filling out the listing paperwork and was confused on why they were filling out the paperwork if the bank was the seller.  

This is a normal question and one that comes up especially when the homeowner comes to the Exclusive Right to Sell Lisitng Contract (ERTS) section that covers compensation to the broker, which says that the “Seller agrees to pay Broker a brokerage fee of:______________.”

I sometimes get, “I’m can’t sign this because  I don’t have  the money to pay you, which I why I’m doing a short sale.”

At this point I try and explain that even though the homeowner is signing the listing paperwork, the bank is the party that will approve the sale or not.  And they will likely try and renegotiate the commission levels the homeowner agrees to in the listing agreement anyway.

The Arizona Association of REALTORs has added a Short Sale Addendum to the Listing Contract that outlines what a homeowner is agreeing to with a short sale and asks them to seek council in the areas of credit considerations, tax considerations, and also loan modification.  It also advises the homeowner that the creditor has to approve the sale and that it may take weeks or months to obtain creditor approval. 

See a copy here:  AAR Short Sale Addendum to Listing Contract

See also:  FAQ on the Short Sale Process in Arizona