Lender wants listing agreement; owner doesn't want agent

Any suggestions on this one? The owner doesn’t want/can’t pay a real-estate agent’s commission, but the lender is wanting a listing agreement before they’ll move forward on a short-sale. What strategy might be used to get the lender to skip the “need” for a listing agreement? Thanks.


This will be difficult. Before the lender will discount, an attempt to sell the property is usual and the listing is usually 2-3 months. An incredibly powerful hardship letter may get the listing waived. What is the value on the property? What are comps? Is homeowner upside down on mortgage? Any equity?

If you have an offer tell the bank that the home is FSBO, then charge a referral fee if you are operating in the name of your company. Usually the lender allows 6% for realtor commision, so if there is no realtor see if you can get the commission in the form of a misc. fee. If the deal is good enough tell the lender that they can save the 6% by letting you purchase the home FSBO. I recommend getting a hud drawn up showing where all the money is going along with a purchase contract between you and the seller, this may entice the bank to accept an offer especially if you are using cash.

When we negotiate with the lender we find that you have to make sure you are speaking with the correct department. If you are talking to someone else every time you haven’t made it there. We plead the you find a professional to help you with your case. If the case is not correctly handled the homeowner could find themselves with large complications. Best wishes.


What’s the problem. It’s not the owner who is going to pay the agent, it is the lender at closing. Find an agent who will list the property, then you come in with contract, property goes pending, agents work is done, and he’ll get his commission at closing. You can still do the negotiating for the short sale with the lender.

I agree. With short sales, the Realtor commission is always paid by the lender. At least that’s the way I always negotiate it. Once the property becomes an REO the bank will pay between 3% and 6% of the sale price in Realtor commissions anyway, so they don’t usually complain about paying them in short sale scenarios either.

Generally speaking lenders will not agree to short sales unless the property is/has been listed to show that there has been an effort made by the homeowner to sell the property and settle the debt. The longer the property is listed the better your chances of having a short sale accepted.

GooD LucK! :beer

I have had short sales approved w/o the property being listed. I have also had short sales approved where the property was listed for a very short period of time.

Yes, a listing agreement for an extended period of time can be very beneficial in supporting your case with the lender.

Dean, if the lender in this case,is requiring it then you will need to find a realtor. The homeowner should not object to a realtor working with you/them on this since the commissions do not come from their pocket. As already mentioned, the lender is paying all commissions. anyways.