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Who pays for closing costs during a short sale?

I've been trying to find this answer online, finding only conflicting information. As such, a thorough answer would be greatly appreciated. by JBonha_103_165 from Maple Valley, Washington. Oct 12th 2012 Reply


Travis Torcoletti (travis.torcoletti)
#0 ranked lender in South Carolina - 372 contributions

it depends on the lender to be honest, some lender will only pay for a few things such as owner's title ins. and some will pay for all of the closing costs. This is something you need to work out with them and make sure it is in the payoff agreement letter.

Oct 12th 2012
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Peter Botros (PeterBotros)
#70 ranked lender in New York - 895 contributions

It depends on your negotiations. Can be the borrower, seller, lender, or combo.

Oct 12th 2012
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

ditto.... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Oct 12th 2012
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Paul McFadden (paul.mcfaddenmortgages@gmail.com)
#42 ranked lender in Washington - 45 contributions

The seller may not have the money to pay for closing costs so the lender would usually pick up the bill.

Oct 12th 2012
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Curt Tiedeman (curttiedeman)
#46 ranked lender in Washington - 28 contributions

There isn't a black and white answer to your question - the bank is taking a loss in a short sale. The more they give in closing costs the more they lose, so their motivation is low. If the home has been on the market awhile they might be more willing to give up closing costs to move the home quicker. You can make an offer and get it approved, then go back and raise the sales price to included closing costs. You do open negotiations back up so their is some risk. It's all about what the bank feels they need to net after closing. The home does have to appraise, but normally short sales are slightly below market value. Your real estate professional (and mortgage professional) can help you with the numbers if you need help. please give me a call. Thanks, Curt

Oct 12th 2012
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Marilyn Woolfolk (Marilyn)
#69 ranked lender in Washington - 2 contributions

Travis is correct it depends on the lender. Most lenders have established their own policy and the listing agent for the property if it is listed should be able to provide guidance on this issue. Most lenders if it is a reasonable offer will negotiate to pay a portion of the closing costs. We are seeing in our area that they will generally agree to approximately 3.00% of the sale price or less.

Oct 12th 2012
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,246 contributions

In real estate pretty much everything is negotiable. Normally the listing agent will have an idea what the short sale lender will allow.

Oct 12th 2012
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Jason Vondrak (jvondrak)
#217 ranked lender in California - 1,741 contributions

In most cases the buyer does. It would be in your favor to negotiate that the seller or lender pays for the closing costs.

Oct 12th 2012
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