Short sale homes offer savvy real estate investors an opportunity to acquire real estate assets relatively quickly for a substantial discount than a home offered at list price.
For current homeowners who are significantly behind on mortgage payments or have negative equity in their home, a Short Sale is a chance to sell their home for less than what they owe on the residence without being held responsible for the outstanding balance in the difference.
Not only does this bring some financial relief to the current homeowner, but it also offers the lending bank a way to liquidate the property without incurring extra costs by forcing the home into the foreclosure process. For buyers, this can be a favorable time to invest.
Navigating Short Sales Intelligently
Before endeavoring into Short Sale homes, it is important to research the overall market and the home itself before making an offer. It is always a best to work with a real estate professional with an investment strategy in place to assure the property that you’re considering meets your objectives for the vested interest.
There are many factors to consider when getting involved in Short Sale homes. Keep in mind that depending on where you live, you may be required to hold a Realtor’s license or Certification to participate in this type of property sale, so be sure to check on local regulations first.
The better you or your team are at identifying sales opportunities and researching potential problems such as liens against the property, potential repairs, and renovation work, and securing financing the deal, the higher your chances of making a lucrative deal. You should always know what the property is worth, be able to assess how much extra money you have to put into repairs and renovations, and have room to mark the home up for your time and efforts you spend on the property.
You should also account for some time to speak with the lender directly, as this type of property sale isn’t as cut and dry as traditional property sales are. Depending on the bank, you may or may not be required to fill out an application form to make a bid on the home. If you have experience writing proposals, this is a good skill to have on your side for negotiating with the bank that holds the mortgage.
If you, the bank, and the owner can come to an amicable agreement on the terms of the sale, the next step is to finalize the sale and take over ownership of the property. Using your strategy for rehabbing the home, you can then get to work on all repairs and renovations that have to get completed to increase the visual appeal and marketability of the property.
Like any other type of investment opportunity, there are always risks involved, so understanding how these transactions unfold are helpful for managing your expectations, timeframes, and your cash flow!
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