This is a common question we are often asked by homeowners. The answer is generally, No, but it can in certain instances. Let’s explore this a bit:
In a short sale, lenders agree to accept less than what they are owed, but because this is a full sale, they understand they’re are costs that need to be paid in order for the sale to proceed. Taxes, title fees, title insurance costs, junior liens, real estate commissions, HOA fees, etc. must all be paid so the buyer can receive the property free and clear. The lenders understand this and rather than asking you to pay out-of-pocket, they just accept what isleft over. 95% of short sales we see have no out-of-pocket costs to sellers.
(Understand that although it is not owed at closing, this is money that your lender is not receiving back and therefore it is not free. In certain instances the lender may ask you to pay back some of the loss. See our article on lender deficiency judgments here and always consult with an attorney. )
In rare instances, the seller may have substantial assets and the lenders like to see a contribution to the loss for those borrowers. Typically if you have more than 6 months of your regular mortgage payment in a bank account, be prepared for the lender to ask you to bring a contribution to the closing. Feel free to contact us for a case-by-case analysis of your situation.
Additional costs may arise from property maintenance (grass cutting, snow removal) and repairs requested by the buyer. Most real estate brokers and buyers understand that the property is sold “as-is”. Although basic property maintenance may be necessary to attract buyers, they are never “required” to being a short sale.
We are always happy to review your situation for free – 720-608-1173.
