Charging the Buyer a Fee to Process the Short Sale Listing

My broker just came to me with a question and I didn't know the answer, so I'm looking for some guidance.  We have an agent in the office who is charging the BUYER of her short sale properties a flat fee at the closing to process the short sale.  This fee is disclosed in the contract as well as the HUD.  Is this OK?  Legally speaking?  Does anyone else do anything like this?


Here are some video testimonials for our Short Sale Lead Machine websites from just a few of the agents who are utilizing them! More coming soon...

Views: 5283

Reply to This

Replies to This Discussion

Yes, we have heard of it.  We had a closing last year where the Buyer's agent collected $500. from the Buyer at closing in a cash sale transaction.


The fact of the matter is this;

Agents/Brokers may charge a disclosed negotiation fee if your state allows it.

Third party negotiators hired by the SELLER can charge the buyer a fee, as long as it's properly disclosed to buyer.  Both Fannie/Freddie purchase guidelines specifically allow third party short sale negotiation fees to be charged to buyers, so therefore it is now considered "resonable and customary" This is completely acceptable so long as it is disclosed on HUD-1 at closing.

And that settles it. Period.

As a real estate closer I have not seen a fee being charged to the buyer for the short sale process.  There are many negotiators out there charging the buyer more in their escrow fee but we have chosen not to do that.  We feel that the seller is the one benefiting fromthe short sale so their fee is higher.  We do short sale negotiations all over and welcome any questions you may have.  You can email me at


Best of luck to you all.  Pam

I am in Florida, and I do this with every short sale.  The lender won't allow the seller to pay, so the buyer pays my negotiator a flat fee at closing.  It is disclosed on the HUD, and there is an addendum to the contract stating the buyer will pay it.


Hi Alexa,

We are in Idaho. Would you mind sharing the language and addendum you use to for the buyer fee? WE are compedlled to start charging the buyer a transaction processing fee.  I would really appreaciate it!



Not heard of this in our market Tracy....................I do a split of 3.5/2.5 as I am unable to charge a seller transaction fee.  Buyers agent can charge their fee and ask for the difference of .5.  I do this because we work extremely hard on these files to get them SOLD AND CLOSED.  AND there is no guarantee that will happen.  I would love some feedback on this because I get agents who ask why only 2.5% and I tell them about the amount of work.  Some agree and some don't. 

First off, what I am about to state regarding commissions is in no way an indication as to how much my brokerage charges nor is it construed as best practices for other brokerages in setting real estate commissions. The number reflected here is for example purposes only! Now that said...

Adjusting a co-broke is the best way to accomplish compensation on a short sale. You do not have to justify it to anyone. I personally do it in two ways:

1. Adjust the co-broke to make it profitable for my company in the manner you suggested.

2. Have the buyer make up the difference. For example, let's say I have a 10% listing agreement and the seller's lender only pays for 6%. I then have the right to collect that 4% difference from the seller. This seller expense then can be moved to the buyer, so the buyer could pay the 4% difference. You will need to check with your state law regarding how this can be accomplished.

I would love to hear what other agents do in markets where you get a listing that is as low as 10K and the seller wants help?  I get a lot of under $30K deals and can not find it to turn them down.  By the time I get paid out of the deal it is just not worth it. 


any feedback on this would be greatly appreciated.  I struggle with this tremendously and am unable to say NO to anyone.

I would team up local investors and have them pay your brokerage a fee to offset the compensation paid by the foreclosing lender. Too many agents think like agents and confine themselves to a standard number.

Personally if there were 10k listings in my area, I would try to pick them up for $500 or less. How much will it cost the bank to foreclose and dispose of?

Not in Maine, need to be a licensed debt negotiator or an attorney to charge upfront fees...check with your state first

We're not talking about upfront fees.

Good "ole Tracy, opening up a can of worms!



Ocwen Contacts Short Sale Package

Started by Jan Baron in Rants and Raves. Last reply by Anna Wilk Jan 14, 2016. 5 Replies

Shellpoint Mortgage

Started by Celeste ODea in General Discussion. Last reply by Brett Goldsmith Sep 4, 2015. 3 Replies

Extension Fees & Closing

Started by Colleen J Couse in Rants and Raves. Last reply by Brett Goldsmith Sep 3, 2015. 1 Reply

© 2021   Created by Mike Linkenauger.   Powered by

Badges  |  Report an Issue  |  Terms of Service