short sale potential problems

Knowingly listing a property below the mortgage balance creates a number of potential problems for all parties involved. The process is glamorized in books and in the media. Without a FULL understanding about a short sale process, listing agents as well as buyer agents are opening themselves up to litigation.

Knowingly listing a property below the mortgage balance takes away the lien holder’s right to be paid back in full. It assumes that the lender is okay with taking a loss, large or small, which is not the homeowner’s or the agent’s decision to make.

What about the commission on a short sale? In a short sale situation, the Seller usually doesn’t have the money to pay the commission. Is the lender going to agree to pay? A listing agent is leaving his/her company open to an arbitration proceeding if the MLS stated commission is not paid from the transaction.
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