Servicing Guide

Published September 9, 2020

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What types of transaction costs can be deducted from the contract sales price when processing a short sale?

The following are the types of short sale transaction costs that may be deducted from the contract sales price:

  • real estate sales commission customary for the market, which must not exceed 6% of the sales price of the property;

  • short sale negotiation fees, provided they are deducted from the allowable real estate sales commission;

  • real estate taxes and other assessments prorated to the date of closing;

  • typical and customary local and state transfer taxes and stamps;

  • title and settlement charges typically paid by the seller;

  • seller’s attorney fees for settlement services typically provided by a title or escrow company;

  • wood-destroying pest inspections and treatment, when required by local law or custom;

  • HOA fees that are past due, if applicable;

  • buyer closing costs typically paid by the seller that are usual and customary for the local market; and

  • any other amounts if authorized by Fannie Mae.

Fannie Mae prohibits the following transaction costs:

  • any outsourcing fees or non-customary third party fees;

  • real estate sales commission paid to the borrower or the purchaser;

  • buyer’s discount points or mortgage loan origination costs; or

  • fees that are not usual or customary for the local market.

For more information please see: D2-3.3-01, Fannie Mae Short Sale

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