Commission on REO or Short Sale

Who pays the realtor's commission on the purchase of an REO or short sale?

BEST ANSWER The bank will pay any customary commissions. They are the seller in the same way a private party would be. Often times the banks will even offer special financing terms to buyers to help make the deal work. You can find a list of bank REO's at .

- RF - Dec 14, 2012 at 11:51AM
2 Answers

The bank is typically going to be the one paying the agent on a short sale or foreclosure.

The reason I say typically is that the bank can dictate terms on the short sale and if they decide the seller has too much money available; then the bank may ask the seller to participate by bringing in some of the amount that is shorted on the mortgage.

In other words the bank may be short $50k but the sellers have $10k available, the bank may require their $10k to be contributed at closing as part of the short sale agreement.

This is not common as most people are insolvent and can not pay anything towards the short sale. But, if you have a large sum of **NON- Retirement funds; then this may be a potential issue for you trying to complete the sale. 

However, in ***most *situations the bank is going to pay 100% of the commissions to the agent on both sides of the transaction.  

In most cases, the bank that is selling the home (REO) or agreeing to the shortsale (the lienholder) factors the commission into the sale price accepted. In simple terms, the bank pays. Many shortselling banks will limit the commission to the low end of the area's acceptable range, or to a dollar figure - this will be comfirmed by their acceptance of the offer or purchase agreement (state dependent). I have never, though, in may carreer encountered a lender that did not pay the agent or agents involved in the sale. Similar to outstanding home owner's association fees, utility bills, etc., this is considered one of the items that must be paid in the course of the transaction.