Southern Maryland Short Sale homes are selling like hotcakes, but is there profit in short sales for owners? Who makes a profit from a short sale, and is the right option for you? If you’re trying to find a way to avoid foreclosure and save your credit, a short sale may be the answer. Here we’re going to go over everything you need to know about short sale homes and who is exactly profiting from the sales. Let’s get started!
The Seller Profits from a Short Sale
The seller of the home profits, but usually not financially. If you’re conducting a short sale on your home, you’re trying to avoid foreclosure and keep your credit; if you pay your mortgage payments on time (FHA rules state that you must never be more than 60 days late) you may even qualify for an FHA/Fannie Mae loan to buy a new home. If you stop making your mortgage payments, you’ll have to wait 1-2 years on average to get another loan to get into your next home.
The Buyer Profits from a Short Sale
But not as much as you might think; short sale homes in Southern Maryland will go for less than market price, but no one is buying a house for extremely low prices (and if they are, they have a long road of restoration ahead). The buyer will end up paying less in taxes, and if they can improve the home to a comparable condition to the houses around it, they can resell it at a nice profit.
The community itself can profit from short sales by new insurance being bought, tax assessors and home remodeling contractors being hired; the list goes on and on, but all in all a short sale helps the seller get back on track and buyers into new homes.
Are There Dangers in a Short Sale?
When you’re putting your home up for a short sale, there’s always the risk that your lender (in most cases this will be the bank that granted you the mortgage) will not agree to a short sale. The lender is often the one person who doesn’t make any money in a short sale, and they’ll often lose money. You will also need to be careful about who you have handle your short sale.
There are many real estate agents that work with investors to get short sales running; this in of itself isn’t a bad thing, but the investor is going to be worried about getting the lowest price, not making sure you get as much debt bundled in with the short sale. The real estate agent (like me!) should work with you to make sure the terms are as amicable for you as possible. While no one can guarantee approval of a short sale, we can do our best to make sure you get a fair shake.
If you want to avoid foreclosure, check out my short sale information page.