Due to all of the restrictions placed on the owner when selling their home as a short sale it’s easy to understand why some people wonder who the seller actually is. It certainly seems that the bank is the true seller considering the fact that they will ultimately be the one to approve (or not approve) a short sale or to accept/reject an offer to buy from interested parties if it gets that far.
While it’s true that the bank is in control of the situation it is also true that in reality it is the homeowner that is the actual seller. Why do I say this? Simple. The title stays with the seller until the seller deeds the home to a buyer therefore the homeowner is in fact the actual seller, not the lender.
That being said however, it is important to realize that a short sale can never occur without the bank’s permission. Why is this? Because the bank stands to lose a considerable amount of money in a short sale and their agreement is required before the process can even begin. Remember, every penny that the bank can save in expenses during this process is less of a loss on their behalf. The bank gets only what is left after all expenses so it is in their best interest to protect themselves as much as possible. You would do the same if you were already taking a loss, right?
So, who pays for any expenses that the bank will not agree to? That’s up to the buyer and seller to decide but if it is not authorized by the lender than they certainly will not pay for it. As with any real estate transaction some things will remain negotiable but sometimes the seller is not allowed to pay for anything extra such as in a HAFA short sale. As always it might be wise to consult an attorney before making a final decision as to the short sale of your home.