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gar1976 · 07-30-2004, 09:20 AM

Short sale, IIRC, is essentially selling off investment property (stocks, houses, etc.) withing a very short period of time from acquiring them.

Problem you have with the house is when you try to sell it. When you buy a home, the seller pays almost all of the closing costs and real estate commissions, so you never really see any of that info unless you read the HUD statement - which most people don't do. So let's take a look, shall we?

You'll have title fees, title insurance, appraisal costs, flood appraisals, and most importantly real estate commissions. The standard cost is around 6%, which is then split evenly between the buying and selling agent.

So, we'll guesstimate here and say that you need to sell the house for around 10% more than you originally pay just to break even. But you want to MAKE money, right? But since this is short-term, it will be taxed at your normal income tax rate, federal we'll estimate at 25% and state, we'll swing it and go 6%. So, roughly 30% of your profit will go straight to your friends in the government.

Anyways, what I'm getting at (in my oh so succinct way) is that unless the property is a real steal, or you have a buyer lined up (since some houses can sit on the market for a long, long time) , I might want to wait a few days and think it over. Or you could buy it, fix it up, and rent it out. Who knows.

I think this is what you're looking for, might wait for some real-estate gurus to chip in too.

07-30-2004, 09:20 AM	#2 (permalink)
gar1976 Custom User Title Location: Lurking. Under the desk.	Short sale, IIRC, is essentially selling off investment property (stocks, houses, etc.) withing a very short period of time from acquiring them. Problem you have with the house is when you try to sell it. When you buy a home, the seller pays almost all of the closing costs and real estate commissions, so you never really see any of that info unless you read the HUD statement - which most people don't do. So let's take a look, shall we? You'll have title fees, title insurance, appraisal costs, flood appraisals, and most importantly real estate commissions. The standard cost is around 6%, which is then split evenly between the buying and selling agent. So, we'll guesstimate here and say that you need to sell the house for around 10% more than you originally pay just to break even. But you want to MAKE money, right? But since this is short-term, it will be taxed at your normal income tax rate, federal we'll estimate at 25% and state, we'll swing it and go 6%. So, roughly 30% of your profit will go straight to your friends in the government. Anyways, what I'm getting at (in my oh so succinct way) is that unless the property is a real steal, or you have a buyer lined up (since some houses can sit on the market for a long, long time) , I might want to wait a few days and think it over. Or you could buy it, fix it up, and rent it out. Who knows. I think this is what you're looking for, might wait for some real-estate gurus to chip in too.