A short sale can be a very good way of investing in real estate, particularly with the current housing market. In 2008, there were 2.3 million households that received some sort of foreclosure notice, and nearly 1 million foreclosures actually went through. With a short sale, your choice of investment includes many of those houses which are threatened with foreclosure, and in which the homeowner does not want to have the specter of a foreclosure on their credit record.
However, if you have never done a short sale before, you will find that there are some tricks to making it go through smoothly and have a successful outcome for you. These short sale secrets can make all the difference between having a happy experience and having a nightmare in trying to buy the house.
If you haven't heard of a short sale before, you need to know that it is buying a house that is going into foreclosure at less than the amount that is owed on the mortgage. Thus, the amount you pay is short of the normally required amount, giving this process its name. As this means that the mortgage is not satisfied in the normal way, part of the process includes negotiating with the lender to take a lesser amount.
Nonetheless, you will be talking with the owner of the house, and providing him with an escape route from the stigma and credit problems of having a foreclosure on his record. Normally you should be able to get his cooperation because of these benefits.
One of the secrets in helping the negotiation is to make sure that you have documentation in the form of recent sales or a Broker Price Opinion (BPO) to convey to the lender what the house may be worth, to support your offer. You should understand that lenders views vary, and it is up to you to convince the lender that your offer is reasonable so that it may be accepted.
Their are several other secrets that will smooth the path of the transaction, and doing your homework to learn about the process beforehand can save you time and money in the long run.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to www.DavidOswaldOnline.com
Tuesday, February 10, 2009
Sunday, February 1, 2009
Short Sale Mentorship
What do you do if you have some money that you want to invest in real estate, or you know that you have good credit and would be able to get a loan on an investment property, but you really don't want to pay the usual asking price for a house in the current housing environment? There is a way that you can buy a house for less than the usual price, but without being involved with a foreclosure auction, which can have drawbacks. After all, we have all heard about foreclosures where the house is trashed by the angry ex-owner on being evicted, and an auction on the courthouse steps can be intimidating, not to mention the problem that you have to pay up in cash immediately.
The alternative to buying at foreclosure if you want to buy a house at a bargain price is called a short sale, and it happens at the pre-foreclosure stage, before the owners have been thrown out. If you do not know much about the process, it can be very helpful to find a mentor to walk you through it once or twice.
If you know what you're doing, then the process is quite simple. You simply find a house which is going into foreclosure, where the owner is upside down on his mortgage, which means that he owes more than the house is worth. Because the home still has a mortgage secured on it, you need to deal with the lender as well as the owner to make the short sale purchase work.
You then go through a process of negotiation to arrive at a price that is less than the outstanding debt, but acceptable to the lender to release the lien against the house. This can take a while, and you need to know or find out what to do at each stage in the process. However, with the assistance of a short sale mentor, you will find that you are able to pick up an investment property with relative ease at a bargain price. The market has never been better for finding many choices of houses suitable for a short sale.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to http://www.DavidOswaldOnline.com
The alternative to buying at foreclosure if you want to buy a house at a bargain price is called a short sale, and it happens at the pre-foreclosure stage, before the owners have been thrown out. If you do not know much about the process, it can be very helpful to find a mentor to walk you through it once or twice.
If you know what you're doing, then the process is quite simple. You simply find a house which is going into foreclosure, where the owner is upside down on his mortgage, which means that he owes more than the house is worth. Because the home still has a mortgage secured on it, you need to deal with the lender as well as the owner to make the short sale purchase work.
You then go through a process of negotiation to arrive at a price that is less than the outstanding debt, but acceptable to the lender to release the lien against the house. This can take a while, and you need to know or find out what to do at each stage in the process. However, with the assistance of a short sale mentor, you will find that you are able to pick up an investment property with relative ease at a bargain price. The market has never been better for finding many choices of houses suitable for a short sale.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to http://www.DavidOswaldOnline.com
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