Top Five Questions Asked When Buying A Short Sale. #1 Who Pays For Closing Costs?

I wanted to share with you the most frequently asked questions a buyer has when purchasing a short sale. This is the first article in a series of five.

Question #1: Buyers want to know who pays the closing costs in a short sale? As a buyer you want to ask your agent this question before you write an offer. The best time to ask it is during your first meeting. In a short sale all terms, conditions and closing costs are subject to lender approval. Sounds pretty vague, right?

Let me tell you what closing costs you should ask for when writing a contract. Then I will tell you what they actually pay.

Buyer should ask the Seller to pay:

Sellers escrow fees

Sellers title insurance

Property taxes-including any back taxes

County taxes

City Required Reports

Retrofitting

Natural Hazard Disclosure

Termite Report & Repairs

Home Warranty

HOA transfer fee

HOA documents

HOA back dues if any

Here is what the Sellers lender typically approves to pay:

Sellers escrow fees

Sellers title insurance

Property taxes-including any back taxes

County taxes

Natural Hazard Disclosure (Sometimes)

Termite Report & Repairs (Credits)

HOA back dues if any (Sometimes)

Each lender is different and has their own policies on what they are approved to pay. That's why it's a good idea to ask for these closing costs to be paid. Keep in mind that short sales are a great opportunity to get a discount on a property. Chances are some of the closing costs will not be paid. So be prepared when you receive the lenders approval for your offer, all the fees might not be covered by the Seller and their lender.

For more information on selling or buying short sales, contact Kristine with Prudential CA Realty-Short Sale Trainer, 310-737-8173. Visit: www.WestsideHomeSolutions.com