Bountiful UTAH – A potential home seller asked me how we get paid on a short sale transaction. So I decided to answer that question in today’s blog post.
Here is how most Realtors get paid on a short sale. They make a real estate commission from the sale of the property. When the property sells a percentage of the sales price is paid as a commission.
Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here.
Many sellers mistakenly think that since there is no equity in the property, then there is no way for the agent to be paid. In this situation the seller’s lender pays the commission.
They are willing to pay a commission on a short sale because if the property is foreclosed upon, not only will the property sell for less money, but they will also have to pay a commission on the sale of the foreclosed property.
Here is an example. You owed $500,000 on your home. The home is now worth $400,000. After real estate commissions, attorney fees, property taxes, sales taxes, and other miscellaneous fees, your lender will net $370,000.
Most people would be horrified at losing $130,000. However, lenders know there is risk in their business. They grant loans knowing that a certain percentage of them go bad.
After they have realized that a loan has gone bad, all they want to do is reduce their losses as much as possible. So they will sit down and calculate the losses on their different options.
We all know the short sale will net them $370,000.
How much will a foreclosure net them? Let’s run the numbers. If the house is worth $400,000, then it will probably sell for 10% less after a 12 month foreclosure process.
So they have a sales price of $360,000. Now, they have to add in real estate commissions, attorney fees, sales taxes, and all the other costs. They could end up netting around $310,000 after the foreclosure.
Accepting the $370,000 on the short sale and paying the realtor is a good alternative. Therefore they are glad to accept it and pay us to sell the property.
Thinking about a short sale?
I can help you short sale your property and never pay the bank another penny. Send me an e-mail at utahhomesaver@gmail.com. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (801) 651-0707
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Thinking about a loan modification? Our Layton loan modification kit has the instructions you will need to get a loan modification approved with your bank. Click here to request a copy.
Thanks for reading this, dave forsberg.
Dave is a Real Estate Agent at Prudential Utah Real Estate - Bountiful Short Sale Realtor:
Phone: (801) 651-0707. utahhomesaver@gmail.com.
Greater Salt Lake Short Sales. Real Help for those that need it most.
View My homes for sale at BuyUtahNow.com.
