Unfortunately, the misconceptions many sellers in Las Vegas may have about this question often prevents them from pursuing one of the best options to a foreclosure—the short sale. They just assume that they won’t be able to pay any closing costs, have the money to cover buyer requested repairs and mostly believe they cannot afford a REALTOR.
In reality, if the seller’s bank approves a short sale, they will allow for the majority of these costs to be taken right out of the sales proceeds, including the REALTOR’s commission! In some cases, the seller may never have to contribute any money at all.
Now that being said, there is no guarantee that a seller will never have to contribute something to the closing. If you’re interviewing prospective real estate agents to list your property, and they tell you this, run! No REALTOR can make such a guarantee. You don’t even have an offer yet; you don’t have an appraisal; the bank has not evaluated the seller’s financial profile; and lastly, you certainly don’t yet have an offer from the seller’s bank with the terms of the short sale they are willing to accept.
Seller has a home on the market as a short sale for $200,000. The bank usually allow for many of these costs to come directly out of the $200,000.
- Escrow and Title fees
- Title Insurance
- REALTOR Commissions
- Taxes (both property and transfer taxes)
- Home Owner Association fees
- Legal Fees (if applicable)
I always try to minimize any potential costs my sellers will have to incur, and present in a straightforward manner, exactly what the benefits and negatives of the seller covering a certain cost, so that the seller can make an informed decision.
In the current Las Vegas real estate market, we are literally trying to settle hundreds of thousands of dollars of debt per property, so in some cases, the sellers may have to contribute something and should not automatically expect that they will not have to contribute in some fashion. When you look at what is often asked from sellers as compared to how much debt is being settled, the amounts are often staggeringly meager.