Question on Short Sale commissions/fees on the HUD

I have a short sale where the bank is allowing a $9,400 commission on the estimated HUD-1.

On Line 701 it says:
$9400 to “XYZ”

My question:
Does it matter if this commission gets paid to a realty or to an LLC? It was originally supposed to go to a realty firm, but the real estate agent is no longer involved.

So at closing, can we just have this check written out to an LLC instead and charged as a short sale negotiation fee? I mean, does the bank even care where it goes if they already agreed to pay it?

They may or may not “care”. Based on my research and training…I have zero experience, it seems that it depends on who the bank is. Question: What do you have to loss if you try it? Will the bank simply reject it and tell you they will not allow it? If so, go for it! Let us know how you fair. Good luck.

I would be very careful how you present that payment if I were you. Only licensed real estate agents can legally receive a commission on the sale of real estate in NJ (I am licensed in NJ).

Hmm. What did the lender say in the payoff approval letter? You probably need to adhere to that letter or they could probably just say that it wasn’t as they instructed and cancel the entire thing with you. In the end, the payoff (instruction) letter they sent you is the real contract that you need to work with. Then again, you can always just call them up and ask if they can modify things for you. I wouldn’t do that too much. You’re bound to get them thinking that you’re too flippant and/or prone to mistakes to be spending their time on.


The payoff letters I receive usually don’t give exact figures to commission or closing costs. Some times they do, but not always.

This specific payoff letter said they’ll accept $250k as a short payoff, of which they must net $235k. So the $15k can be used for commissions, closing costs, etc. (These are not actual figures).

It’s happening to me about 9 out of 10 deals where I will have my fee on the HUD but the approval letter does not include the fee. They usually add the fee to their bottom line and leave me out of the deal in the end. I find myself going back to the agent, seller or buyer for help and one of them will typically help out - they are usually very appreciative with the work I have done. I’m wondering if we are able to include the fee on the buyers side instead. I really don’t think we could because the lender will see it and probably want to take it or disapprove the whole deal? I haven’t attempted it - just because I didn’t want to chance it.

Hey Cruz,

I will try it out and keep you posted on developments.