The Short Sale Process for Investors
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What's The Importance of Short Sales in the Present Market?
Short sales have grown dramatically with the economic downturn. Estimates for 2011 have short sales rising at an exponential rate compared to previous years. A short sale prevents banks from foreclosing a home and having yet another abysmal mark on their records. Today’s real estate market has opened the gates for more short sales to take place, but many real estate agents and investors have never completed the short sale process. So let’s take a look at what the process looks like.
How Do Short Sales Take Place?
Shorts sales take place between an investor, home owner, and their lending bank. At times the home seller will hire a short sale specialist or other professional to assist them with the process. Although this does not happen all the time, it can be a problem for new investors. You have to know what you are stepping into with each sale, so be sure to discuss fees and other costs associated with any other persons involved in the process.
Short Sales - What You Need to Keep in Mind
In addition to knowing who all will be taking a cut of the final sale commission and fees, an investor should also be on top of the timeline involved with the short sale. The process can take months to resolve or it could be a much faster process, depending on the parties involved. In order for a successful short sale to take place the investor must have the confidence of the seller. They need to be included in all communications with the foreclosing bank and know exactly how much money is past due. The goal should be to circumvent the foreclosure and receive the property at a discount.
Short sales can be confusing...
Short sales can be confusing. It’s a trying process and one that takes the patience of the investor. In the end, the bank may dispute the valuation of the property and the subsequent bid on the property. This can be heartbreaking, especially if it’s the first time the investor has tried for a short sale. But largely short sales have much to offer even the seasoned real estate investor. When the process works the investor makes off with a healthy discount on the property.
What the Short Sale Investor Needs to Know..
The process is a fine on and a hard one to predict. The short sale investor needs to gain the confidence of the seller and also learn the ropes with the foreclosing bank. When submitting an offer to the bank, they must be sure to bid at a price point that won’t offend the bank, but will still lead to a tidy profit. It’s a numbers game as much as any other investment scheme. Be sure to approach any short sale with confidence, but the assuredness that if this one falls through the next one may not.
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