Do You Still Have to Pay Closing Costs in a Short Sale?

Short sales can offer relief to struggling homeowners—but do sellers still have to pay closing costs in a short sale? The answer isn’t always simple. If you’re thinking about a short sale in New Jersey, it’s important to understand which fees the bank will cover—and what you may still owe.

In this post, I’ll break down exactly how closing costs work in a short sale and what both sellers and buyers need to know before heading to the closing table.

What Is a Short Sale?
Before we dive into costs, let’s quickly recap what a short sale is. A short sale happens when a homeowner sells their property for less than the amount owed on the mortgage. The lender agrees to this deal because it’s often better than going through foreclosure.

That’s why understanding short sale meaning and the bank’s role is key—because the bank calls the shots on what fees they will or won’t approve.

Who Pays Closing Costs in a Short Sale?
✅ The Lender’s Role: In most short sales, the bank covers many of the typical seller closing costs—such as real estate commissions, title fees, and certain taxes. Why? Because they want the sale to go through and avoid the bigger losses of foreclosure.

✅ Seller’s Responsibility: While the bank covers many costs, the seller may still be on the hook for certain items. Common examples include:

Unpaid HOA fees

Outstanding utility bills

Certain government liens or fines

Any costs the bank explicitly declines to cover in the approval letter

That’s why reviewing the short sale approval letter carefully is crucial—it spells out exactly what is and isn’t covered.

Best Practices: How to Avoid Surprises
✔️ Hire a Short Sale Specialist: A short sale pro (like myself) can help you negotiate the best possible terms with your lender—maximizing what they’ll cover and protecting you from surprise costs.

✔️ Communicate Early: Get a clear picture of your potential expenses early in the process so you can plan ahead.

✔️ Watch Deadlines: If closing delays happen, you could be responsible for extra fees—so staying on schedule is key.

Moving Forward: Get Expert Short Sale Help
If you’re thinking about selling your home through a short sale, the right guidance makes all the difference. I’m Johnny Rodriguez—North Jersey’s First AI-Certified Realtor—and I help homeowners like you navigate every step of the short sale process, from approval to closing.

👉 DM me “Short Sale Help” today and I’ll send you my free short sale checklist—so you can avoid costly mistakes and move forward with confidence.

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