Hi everyone, long time lurker first time poster.

I have a question about a short sale listing. I am representing the seller, just got an offer asking for seller to pay buyer's closing costs. Seller can't afford to pay, is there a way to word the offer so that the bank will pay buyer's closing costs.

Thanks in advance

You would counter the offer and put in a stipulation sellers acceptance of the contract is contingent on the bank paying closing costs not to exceed XXXX for the buyer and also bank must agree to the short sale contract price and release seller from any future liability or defeciency judgements.

If all that does not occur your seller is not bound to specific performance of the contract.

Also remember that typically there are costs usually paid by the seller on the hud-1 besides say buyer loan costs,like recording fees,transfer tax,etc. Your seller has no money so they buyer or bank would have to cover that. no legal advice

Thanks for the tip and quick reply!

I can't believe that an agent would submit an offer asking for a seller to pay closing costs on a short sale. What does that agent think a short sale means? The seller has no money, so why would they pay closing costs? I know you have to submit the offer if that's what your clients want, but I sure would make it clear to the other agent that I tried to discourage it.

I agree with Super's answer.

My experience with short sales has been different - that it's all in the bottom line to the bank. It doesn't matter whether that bottom lines comes from the offer price or in closing costs and I've found banks perfectly willing to pay closing costs as long as their net falls into their parameters.

That's good to know.

The bank will pay closing costs if the net is within their bottomline. They will not pay for a home warranty.

That hasn't been the case for me but all situations are very different as are lenders.

I had one lender offer to pay a medical lien on a home.

Another agent told me that her experience has been the lender accepts the first offer she submits even if the latter are higher offers.

Again, not my experience.

It depends on the situation. If the buyers bump up the purchase price and include the closing cost in the overall amount of the loan in shouldn't matter. As long as the bank nets the same amount.

As long as the contracts has some verbiage that the sale and terms are subject to bank approval, it is usually fine to say that seller is paying closing costs. This is where the bank will cover typical costs.

Also, there is no blanket ruling on what banks will not pay, such as a home warranty. Some banks pay more costs than others. I have seen just about everything. So for someone to say that the banks won't pay a certain cost is incorrect.

What I have notice with buyers asking sellers to pay or do comes to the bank appoving it. That is why on the listing it says lenders approval is needed. I know that you have notice that even thought the seller approves an offer it real mean nothing without the banks blessing