Why Can't I Get a Piece of the Pie?

More often than not, sellers who are in foreclosure owe more on their home than what the property is worth. When this happens, instead of letting the home go into further accumulated missed payments, interest, penalties, attorney fees, a short sale can be an option. A short sale occurs when the lender agrees to accept less than what is owed on the mortgage, and the buyer must be a cash buyer. While this process is detailed and time-consuming and must be processed and negotiated correctly, (and not by an amateurish real estate agent), it can be beneficial for all parties involved.

Why Homeowners Can't Profit from a Short Sale

One of the main rules of a short sale is that the seller is not allowed to receive any proceeds from the transaction. This is a written agreement between the lender, cash buyer and seller. If the lender audits the sale and discovers that the buyer has given money to the seller without the lender’s consent, the lender has the legal right to demand repayment of the discounted amount in full and will proceed with legal proceedings to recover their discounted monies from the cash buyer. In a nutshell, it is mortgage fraud and punishable by law.

Despite this, I often encounter homeowners who ask, "Why can't I get a piece of the pie? You're making money on this deal, so I should get part of the profit too."

The Risks of Trying to Profit from a Short Sale

Let’s be clear: a homeowner is not a business partner in this transaction. They are not part of the negotiations, nor do they have a voice in the financial terms of the deal. The seller is someone who, for whatever reason, was unable to pay their mortgage or has inherited a property through probate. But they are not investors—they are sellers.

Any profits made in a real estate transaction, whether large or small, happen when the buyer purchases the property, not when it is sold. It is a fundamental principle in real estate that your profit is made when you buy, not when you sell. The homeowner had their opportunity to profit when they originally owned the property and paid their mortgage. When a property goes into distress, it is no longer an opportunity for the previous owner to demand a share of the profits—it is a financial recovery process.

By demanding a payment that is illegal to receive, the homeowner may believe they hold the cards. I have heard statements such as, "I'll let it burn to the ground unless I receive monies." Why is that? Often, they are angry and taking out their frustrations on their relatives, neighbors, or friends—hurting the value of the entire neighborhood. They are also preventing the home from being rehabbed and resold to a family who would truly appreciate it.

Adding to this issue, some sellers claim they never received a mortgage statement from the lender and, therefore, simply did not make their payment. If you budget monthly for your mortgage and fail to receive a statement—whether by mail or email—that does not absolve you of your responsibility. Whether it's your mortgage or one for a loved one who has passed away, it is your duty to conduct proper due diligence. Blaming a missing statement does not change the fact that payments were still due.

The Risks Cash Buyers Take

Many homeowners fail to recognize the risks cash buyers take when purchasing real estate. There are holding costs such as property taxes, permits, undiscovered issues with the home that can be costly, interest owed on borrowed money, and a range of other expenses that sellers often don’t consider. The market itself is another significant risk—in a declining real estate market, a property’s value can drop 20%-30% during the rehab time frame, cutting into any potential profit or even resulting in a loss. Buying distressed properties is not a guaranteed payday; it’s an investment with substantial financial exposure and risk.

Need Help with a Short Sale? Contact Sandy Buys Houses

If you are in foreclosure and unsure of your options, Sandy Buys Houses can assist with a short sale. Our team has extensive experience working with lenders to negotiate short sales, helping homeowners avoid foreclosure and move forward with peace of mind. Don't let frustration and uncertainty take over—reach out to us today and let us guide you through the process.

Another Solution: Sell Your Home for Cash

If you're in a tough financial situation and need to sell your home fast, there's a better way. Sandy Buys Houses is a trusted cash home buyer in Southern Florida, providing homeowners with a fair, honest, and hassle-free way to sell their homes without dealing with complicated short sale restrictions.

• No commissions or hidden fees – You keep 100% of the offer.

• Sell as-is – No repairs, no stress, no waiting.

• Fast closings – Get cash in hand in as little as 7 days.

• No obligations – If our offer isn’t right for you, there’s no pressure.

  
  

📞 Call or text us today at 813.690.4979📩 Visit https://www.sandybuyshouses.com to get your free, no-obligation cash offer!

Don't let anger and frustration dictate your future—choose peace and tranquility by working with a company that truly cares.