We Do Short Sales And So Should You

When a homeowner needs to sell their home and they owe more on the property than its worth, a short sale is the process of working with the bank who holds the lien or mortgage on the home to agree on a discounted payoff price for the home that is less than the amount that is owed on the property.

Be Empathetic With Homeowners

Homeowners facing the decision to short sale their home are also facing destruction of the their credit and embarrassment for themselves and their family. Be empathetic to the homeowner’ s situation, listen to their story and try to understand their situation. Homeowners are typically going to work with investors who make them feel comfortable given their current situation.

Learn the Short Sale Process Inside & Out

On Your End and the Homeowner’ s End. The homeowners are going to have a lot of questions because most people are uneducated on the short sale process. Understanding the short sale process on your end and their end will help make the homeowners feel comfortable working with you and it will help you save time in the process by guiding them through all the way to closing.

Be One Step Ahead of the Bank

Purchasing short sales is not easy; there is a lot of red tape to navigate your way through, so it’s best to be one step ahead of the bank. Send the bank a copy of your earnest money deposits, and expect them to ask you to increase it. Send the bank a pre approval letter from your lender. Send the bank a comparative market analysis. Send the bank photos within the property needing repair justifying your offer.

Be Firm and Aggressive

Expect the lender to request a counter offer be made; be ready to counter the counter offer. Place a deadline on the offer. Provide as much proof to the lender as possible to justify your offer such as Neighborhood information including the prices of recently sold homes, crime rate factors, child predators and sex offenders in the area and any other unfavorable factors that would lower the price of the home. Create a cost analysis of the damaged and worn areas of the house with an estimate to repair/replace them. Reserve the right to conduct inspections.

Working with a Real Estate Agent

If you are working with a real estate agent, be sure to negotiate to waive the difference between the commissions they receive from the lender and the commissions your buyer's broker agreement specifies. Without a waiver you might have to pay it out of your pocket, as the lender is of course going to reduce the amount of commissions paid to real estate agents/brokers.

Do the Math First

Be sure you know your numbers, typically with a house in the $150,000 range you should look to make between $15,000 and $20,000 from the deal to make it a good investment. If you do the math accounting for all of your out-of-pocket costs to purchase the property and you are not looking at netting $15,000 minimum, you should consider looking for another investment property. You out-of-pocket costs should include renovation costs if any, holding costs for the duration you expect to hold the property before selling it and closing costs to in turn sell the home.

We do short sales and if you or someone you know needs our help please contact me.