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Understanding Short Sale Real Estate Investing |
By Kyle Edginton
 You might be rightly afraid to deal in real estate in the present scenario since you would not know whether the price of the property that you have just purchased might fall even further before you have a chance to flip it. In this case you should consider short sale real estate investing.
Essentially, a short sale means that you buy a house whose owner is unable to make mortgage payments and is on the verge of losing his home, while at the same time convincing his bank to accept a payment, which is less than the mortgage amount. This move could work since the homeowner can now be free of making future mortgage payments on the house, which he is not in a position to do anyway. The bank would rather dispose off the property than repossess it and put it up for auction through foreclosure, which could be a time-consuming and costly process.
Once you have identified the property that you like, then the next thing to do is to meet the owner. You will need to be sensitive
to the seller's financial situation and problem. You should then be able to provide a solution to his problem and while talking with him you should be precise and clear so that there is no misunderstanding between you.
Once the seller is convinced, you should get his willingness to sell in writing, as evidence for the bank. Get details of the lender so you can approach them with your offer. You will need to be flexible while dealing with the lender since they might not accept your offer immediately. Show your seriousness about purchasing the property while raising the offer and convincing them to come down a little. Once your deal is approved, get everything in writing. Also get an assurance from the lender that they will not pursue the seller for any difference of payment since what you will be paying the lender could be much less than what was owed by the seller.
Persistence is very important in this matter as you might not be able to convince every seller or bank every time you are interested in a property. Carry on nevertheless since due to the present economic condition there are many homes up for short sale. You will need a good attorney, tax consultant and in some cases even a good contractor to take care of the physical and legal well being of your property once you have purchased it. A good broker would also be very helpful in case you are new to such dealings. Once you get the hang of things then you will soon be able to find out immediately whether the property, its owner and its lender can all merge together to provide you with a quick and painless deal.
The conditions are right for you to try your hand at short sale real estate investing and the rewards could be quite high once you gain experience in these types of deals.
If you are a real estate investor looking for new strategies and even a profitable deal or two, sign up for our Investor List at http://www.WhereInvestorsProfit.com.
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