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
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I just signed an offer on my home ( short sale) with my realtor. When reviewing the documents it stated that we agreed to pay Buyers closing costs up to 3% ( FHA loan), apprasial, and our realtors fees. I am not in general RE however I have sold new homes for over 30 years and a Seller to me is the person on the deed of Trust however my realtor is telling me that it is B of A. and as your letter stated regarding this question the Seller ( lender would need to approve the fees. We requested our realtor to write an addendum to the purchase stating that the lender B of A pay all fees and a forgiveness of debt, well she argued with us and said that the short sale addendum stated that the Seller ( lender) would pay the fees and if they didn’t agree we had no deal. I didn’t see it her way, I see litigation, that if the Buyer wanted to pursue the transaction if we did not pay closing costs and Realtor Fees they could sue us for specific performance. So, with all this said and reviewing your short sale addendum where does it state the Lender agress to pay the fees?
I would really appreciate your reply,
DeeAnn Collins
DeeAnn…what state are you in?
In AZ, you cannot sue for specific perfomance on failed real estate deals…the buyer can walk away during the insection period and the seller can cancel the sale at any time it seems with no recourse….sellers get the earnest money as compensation if the buyer pulls out after the inspection period.