We received this real estate question from Jackie via our website:
In Minnesota, who pays the real estate fees when you sell your home on a short sale?
Great question! When you buy or sell a house there are always fees that need to be paid and a short sale transaction is no different. Here is a breakdown of the fees for each side:
Loan Closing Costs
The buyer is responsible for paying all fees related to getting a loan on the home. This includes loan origination, appraisal and title fees. The buyer can ask the seller to pay a percentage of the closing costs, but this will be negotiated up front. More often than not the bank won’t pay closing costs, but it never hurts to ask!
Property taxes are prorated at the time of closing so that the seller pays for the taxes during the time they lived there. If there is enough room in the loan payoff, the bank will pay any portion that hasn’t been paid by the seller. The buyer’s property taxes are usually set up to escrow and are included in the loan closing costs.
The bank pays all real estate commissions for the transaction for both the buyer’s Realtor and the Seller’s Realtor.
Real Estate Admin Fee
The seller is responsible for paying the real estate admin fee that is charged by the seller’s Realtor’s real estate company. The bank may pay for it if there is enough room in the payoff and if it is negotiated up front. The buyer’s admin fee is included in the loan closing costs.
If the seller is behind on any water bills, Homeowner’s Association fees, etc. those will need to be paid at the time of sale. If there is enough room in the loan payoff, the bank will pay the outstanding bills.
In the State of Minnesota you have to pay a State deed Tax when you sell your home. The bank will pay this fee if there is enough room in the loan payoff. As a buyer, when you obtain a new mortgage on a house you have to pay a Mortgage Registration Tax and this is included in the buyer’s closing costs.
If you are selling a home on a short sale, there is a chance you could not have to pay anything when you sell your home. It is imperative to have a Realtor that represents you that knows what they are doing and knows how to negotiate with your bank or mortgage company on your behalf. If you want to know more about the potential of selling your home on a short sale before you are at risk for foreclosure, please give us a call today. We are here to help in any way we can!
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