What Do Realtors Make on Short Sales?
A short sale can remove homeowners from heavy burdens of home ownership when a short sale agreement is completed with their lender. For a Realtor, a short sale will still net them a commission based on the agreement they have with the homeowner.
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Process
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When a homeowner wants to sell his home, he asks a Realtor to list the house and aid him in selling it. If the home is worth less on the market than what the homeowner still owes on it, an arrangement with the owner's lender, called a short sale, can be negotiated.
Definition
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The acceptance of a short sale agreement between the homeowner and the lender means the lender is agreeing to take less money than is owed on the house to erase the homeowner's debt.
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Considerations
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While the Realtor will be aware of the short sale and must disclose this to potential buyers, her contract with the seller and her commission are based on the finalized purchase price of the short sale transaction.
Effects
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The sales contract that a homeowner signs with a Realtor will have a designated commission agreed to be paid by the homeowner upon the sale and closing of the property. The commission amount is based on the final purchase price. The Realtor will split that commission with the agent who finds a buyer for the house.
Results
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The Realtor and her commission earnings are unaffected by the short sale process and are based solely on the contract commission stated in the listing agreement with the homeowner. While the lender may lose money on this agreement, the Realtor makes the same percentage as she would on any other listing.
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