Who Benefits From a Short Sale?

The question is if the seller isn't making any money on a short sale, who is making money? Because you know that somebody is going to come out ahead. In this case, it actually is a win, win, win.

· The Bank - The existing lender avoids filing foreclosure, avoids carrying the property on the books when nobody bids at the auction, and avoids more depreciation during marketing for a new buyer.

· The Seller - For homeowners, a short sale removes your burdens and allows you to move on with your lives. For an owner/investor in particular it stops the bleeding and opportunity cost. Credit ratings are not ruined as with a deed in lieu or foreclosure auction, allowing you to regain your financial stability and qualify for a new mortgage at some time in the future.

· Listing Agents and Buying Agents - Real estate agents’ commissions are paid by the bank/lender. Our agents always persevere for full commission however, will reduce their commission as needed to make the numbers work.

· The Buyer - It is likely the buyer purchased the property at or a bit below market value, which lowers the buyer's basis in the property and lowers its future taxation by the tax assessor. As a result, the buyer's mortgage payment is reduced because the loan is less.

· The New Lender - The new lender makes money because a new loan generates new business and new revenue. A new loan pays the underwriter and loan processor as well.

· The Appraiser - Even though the property may be selling for less than market value, the new lender will require that the buyer obtain an appraisal. Appraisers can earn $250 to $650 for an appraisal.

· The Surveyor - If the buyer is obtaining a new loan, a recent survey is required to be performed on the property. Surveyors can earn $250 + for a survey.

· County Tax Assessor - In areas where property is reassessed upon sale, the tax assessor will continue to collect property taxes on a timely basis and perhaps at a higher assessment value due to the resale value. Refinancing a loan does not ordinarily affect tax assessments.

· Insurance Company - The buyer's insurance company picks up a premium for insuring the buyer and the new home. In addition, the insurance agent earns a commission on the homeowner insurance policy.