- A short sale occurs when a home is sold for less than the value of the mortgage attached to it. Lenders allow short sales when it is more cost effective than to foreclose. After a short sale closes, the remaining balance owed to the lender is usually paid by PMI, the borrower or written-off by the bank as a loss. Purchasing property on short sale can be a profitable method of buying real estate, especially structures that need little or no repairs. While the process of short sale purchasesnew home for sale image by itsallgood from Fotolia.comAllowing a short sale is, at times, cheaper
for lenders than forclosure.
straightforward, there are some things to note and tips to consider. - Although short sales can often result in purchasing property for considerably less than it's worth, flipping short sale homes for a profit can sometimes be difficult. Because short sale properties have mortgages worth more than the homes themselves, it is wise to do a comparable sales search before making an offer.
- Some short sale properties contain first and second mortgages. This is usually not a problem if both liens are owned by the same lender. When there are not, sales can become problematic, especially when second mortgage lenders demand they be paid in full upon sale. Ensuing negotiations between lenders can result in delayed sales, rejected offers and a final sales price not capable of realizing buyers incentives to make offers. Most real estate agents are able to discover the number of liens short sale properties have attached to them.
- One of the keys to purchasing short sale homes is locating properties with approved sales prices. These properties have already been through the initial stages of the short sale process and lenders have agreed seller prices. Properties with approved prices are usually not littered with liens and are priced to sell.
- Because lenders are already at a loss when short sale properties hit the market, low-ball offers are commonly rejected. Some are not even considered and get lost in the scramble to move the property. While offers for slightly less than asking prices may be considered, blatant low-balling should be avoided.
Researching Sales Comparables
Discovering the Number of Property Liens
Search for Approved Prices
Avoid Low-Ball Offers
Read more: Tips on Buying a Short Sale Property | eHow.com http://www.ehow.com/list_7187271_tips-buying-short-sale-property.html#ixzz18UFjm5Co
1 comments:
Thanks for sharing those tips. Those tips are what property buyers should keep in mind to make their buying process more rewarding experience.
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