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You’ve heard of foreclosed properties - and I wrote a nice tutorial on buying them here, but have you heard of short sales?

What is a short sale?
A short sale means that the homeowner can’t sell the home for enough money to pay off the bank. Therefore, the bank must agree to take less money than they are owed - or foreclose on the property

Why would the bank do this?
Often, it is less expensive for the bank to accept a short sale rather than to foreclose. A foreclosure takes longer (and time is money), the property is often trashed by the departing occupant and the home is ultimately sold to a wholesale buyer at a deep discount.

That being said, it is never a sure thing for a bank to authorize a short sale. All parties involved have to convince the bank that

  1. The home owner will walk away an d let the bank foreclose if they don’t get short pay approval
  2. The prospective buyer is qualified and bone fide
  3. The offer is the best the bank will likely see

It often takes a bank several days to a few weeks to approve a short sale.

Why bother buying a short sale?
Only if you are getting an outrageous deal. Let’s be clear, these home owners didn’t just wake up yesterday in financial trouble. The home has often been neglected or has major renovation that is incomplete. There is often, though not always, one major factor inhibiting it’s potential resale value such as small yard, poor location or hard to fix floor plan problems.

However, there are gems along the way and a smart buyer who has taken the time to learn the inventory can really scoop a deal.

How do I find a short sale property?

Click HERE for the whole article…