How to Buy Short Sale Real Estate
If you want to buy short sale real estate, you don’t have to be an expert. There are steps that you can follow to get the best deal.
Know the process and negotiate with the lender.
Before you get involved with short sale real estate, it is vital that you have a thorough understanding of the industry. The reason why investors chase short sales is because it can offer them the best deals. You should be extra cautious when dealing with pre-foreclosure since it can get complicated if you don’t know your way around.
What Do Short Sales Mean?
A short sale takes place when the lender accepts the offer of the buyer to get a low-priced payoff, in comparison to what the seller owes the lender. Even if the seller accepts the price offered by the buyer, the short sale will not be completed unless the lender agrees to it. Some lenders tend to opt for a short sale when the value of the property has fallen and the seller owes more that the actual value of the home. The lender hopes to get a larger portion of the owed amount rather then not getting money at all.
An Understanding of the Process
The foreclosure rates have increased in the recent years and so a lot of homeowners are now considering a short sale. Here’s what you should do:
- The first thing that the seller has to do is to make arrangements with the lender.
- The selling price of the property is usually lower than the money owed to lender. Because of this, they must convince the lender to agree.
- The remaining balance is ‘forgiven’ by the lender and the seller can avoid the rigorous foreclosure process. Most of today’s lenders are willing to proceed with short sale rather than unloading properties.
- Homeowners facing foreclosure are willing to proceed with the short sale because it will have less damage on credit.
- Striking the best deal with the lender is vital to complete the short sale.
How to Purchase Short Sale Properties?
You will have to identify your own list of short sales. Try to contact a real estate agent to handle the tough process especially if this is your first time to buy one. You will have to check out the properties that you’re interested to buy. It is important that you prove that the house is a true bargain. You have to look around and by simply doing your homework you can find the best deal. Will you be able to finance the purchase on your own or will you apply for mortgage? Make sure that you check if there are any liens attached to the property. You also have to deal with lender to finalize the transaction. When an agreement is reached, the short sale is closed.