Whatfees and/or costsis a seller liable for in a short sale?
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Whatfees and/or costsis a seller liable for in a short sale?
I am currently being represented by a broker to make a “short sale” on my home. My bank has extended my foreclosure date for 30 days. My real estate broker has presented an offer from a buyer in an attempt to complete the “short sale” on my house. The buyer has requested the seller to pay for title insurance, any repairs on the property, all inspection fees, county/city transfer taxes, a 1 year warranty on my house, etc. My broker claims that if I agree to these “seller pays” items and sign the offer, my bank will actually pay these items not me, since my property was pending foreclosure and because we are requesting a “short sale”. If I am listed as the seller then I wouldn’t I be responsible?
Asked on September 7, 2011 under Real Estate Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
In a short sale of real property where the buyer will be receiving a loan that is not a federally funded loan, the seller can agree to pay what requested and agreed upon fees and closing costs that the buyer wishes to be paid out of his or her own pocket in order to complete the short sale.
However, you need to be very careful about any requested fees that the buyer wants you as the seller to pay if the loan to buy the property is a federally funded loan in that there could very well be RESPA violations for payment of title insurance, transfer taxes, inspection fees and the like in that such are deemed "hidden fees" under RESPA, are not allowed and stiff fines and penalties could be imposed upon you and others through H.U.D.
If the loan is not a federally funded loan for the purchase, you can pay the requested items stated in your question. However, you need to have a written agreement that the bank will reimburse you for such costs and a set time for such.
Make sure that the requested payments to the seller do not amount to a RESPA violation.
Good luck.
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