Walter Ritchie posted an update 4 weeks ago
Buying short sales is definitely an extremely profitable way to purchase a single property or invest in multiple properties. A brief sale is a real estate transaction in which the seller has stopped making payments on the mortgage and has little, or no equity left in the house. The bank trying desperately to not have to foreclose (costing them thousands in legal fee’s and time) allows often for the seller to sell the property for less then the amount owed and forgive the difference.
In the bank’s mind in any event they have a major problem if the borrower cannot make the payments: either they spend legal fees, time, and take the chance that the property will undoubtedly be in sub-par condition because of the fact that most times people are foreclosed upon the homes are not properly maintained. Then they have to get the property back in shape hire and pay an agent to sell the house for the most they are able to enter a REO situation. OR the lender can allow the current seller to sell for around the market will allow and just pay all costs from the sale (that they would need to pay anyway) and obtain a check for what the house netted after the sale, a much faster and several times much more profitable situation for the bank and better situation for owner looking at the chance to be foreclosed upon.
To find short sales your very best bet would be to hire the services of a real estate agent that specializes in them or at least has a very good grasp of how they work. A realtor that is very experienced in them would be the optimum resource to find, negotiate, and help you in the purchase of the property. Banks by their nature have become difficult to deal with and take an extremely very long time to make decisions about what price they will let their homes sell for. Losing mitigation department of the bank that’s servicing the loan is definitely the department handling all of the banks deals with regards to short sales, and that department of the lender is in charge of getting the best terms for the bank and getting as much out from the assets they are responsible for. Many times the loss mitigators can make bonuses for maximizing the total amount they get for the properties that they are currently taking offers on. A sharp real estate agent will be your best asset in defending why, and what terms you as a buyer will accept from the lender handling the sale.
The short sale process is very detailed and every bank does things differently which means this should be considered a guide but for the most part this is the basic routine occurring when investing in a short sale. First an offer is submitted to owner (which is still in control of the property) and they need to sign off on the offer first. As a buyer you will need a iron tight loan approval or often the bank will not even look at the offer for fear that you as a buyer are not even qualified. After you submit the offer, seller signs off onto it your offer with loan approval will undoubtedly be submitted to the bank. It will require typically 3-6 weeks for the bank to react to the offer. What they do throughout that time is order an appraisal of the property to establish what the fair market value of the house is in it’s current state, and marketplace. Then they put your offer in line that a loss mitigators desk these mitigators handle all of the offers and review them for the lender and since they handle sales for all over the country they’re typically very backed up and take a very long time to respond. Once they do respond they will probably counter the offer submitted because they want to get the buyer to offer the most money for the lender as possible. Here’s where a experienced and competent agent will help you to deal with the lender and negotiate terms on your side not the bank’s.
When all the terms have been agreed to and the offer now becomes a contract escrow timelines start. (escrow is opened at the time of the initial offer that’s accepted by seller but hasn’t yet been submitted to bank.) Most buyer’s will request a home and termite inspection and they are conducted just as a regular deal is, the hang-up often is that any issues (and you will have issues) which are found with the home will not be able to be fixed generally in most circumstances since the seller does not have any money to do repairs.
quần short who buy short sales should place offers low enough that whenever small issues are located during inspections they are OK with proceeding to close, if large major issues can be found in the home it is most likely best to get back to the bank and ask for repairs or just cancel your contract and find another property. After inspections are complete the short sale follows exactly the same closing activities as a normal sale does.