Making Short Sales the Tim Mai Way
Short sales can be profitable, but they're not as common as other techniques and more complicated to carry out. Below, I'll describe what short sales are and provide the basics of such transactions. In order to get in-depth information, go to the link mentioned above.
What Is a Short Sale?
Simply put, a short sale occurs in a situation when a home owner's debt on the property is greater than the amount for which the property can be sold. This means the lenders are willing to accept less than the total amount due. Here's an example: Assume a homeowner has an unpaid loan balance of $120,000, but the property will only sell for $100,000. The lender accepts that $100,000 as full payment, which is obviously "short" of the full $120,000 payment.
Since lenders aren't in business to lose money, you can imagine that they're reluctant to do short sales and will often only do them as a last resort. It can make more financial sense for them to go through with a foreclosure.
Since lenders aren't in business to lose money, you can imagine that they're reluctant to do short sales and will often only do them as a last resort. It can make more financial sense for them to go through with a foreclosure.
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Why Is a Short Sale More Complicated?
A SHORT SALE is a complicated process due to the fact that so many factors are involved: e.g., the loan mitigation policies of the lender and third-party investors; the financial condition of the same; financial condition of the borrower; the property's as-is value; the cost to "repair" the property to put it into saleable condition and market it, etc. In addition, approval for short sale must come from the investor who actually owns the loan. Moreover, if the lender is a government-sponsored institution like Fannie Mae or Freddie Mac, approval can take a long time, given the nature of federal-type bureaucracies. Over View
When Will Lenders Accept a Short Sale?
Sometimes, homeowners experience a devastating illness like cancer that eats up all their financial resources. Other times, homeowners are military personnel who are called up to active duty for extended periods of time and lack the income to continue mortgage payments. There are many other instances all of which fall under the "hardship" category-disabling, permanent injuries; financial insolvency; convictions; lack of employment due to economic conditions beyond the homeowner's control, etc. In these instances, lenders are willing to consider a short sale. How Do I Know If A Property Qualifies for a Short Sale?
In order to know if a property qualifies, you'll need to gain knowledge. First, know the lender's loss mitigation policy. What's their record on dealing with short sales? If it's seldom or never, a short sale is not worth your time. Second, know the number of liens recorded against the property title and the total amount of money in those liens. Third, know the borrower's present financial condition. Fourth, know the type of loan that's in default and its current status. Fifth, know both the property's as-is market value and its as-repaired value. Sixth, and finally, be aware of the state of the local economy and the current real estate market conditions. Analyze all this information to determine if a short sale is worth pursuing. Resources
- America's Most Trusted Source For Deep-Discount Bargain-Priced Properties
- FREE instant access for 30 days to this secret list of motivated sellers, deep-discount wholesale deals, pre-preforeclosure, and bankruptcy bargain-priced properties%u2026with no strings attached.
- Secrets To Pre Foreclosure Profits by Tim Mai
- In the real estate market, knowledge is definitely power-and the secret to profits! Since the subject of this Lens is pre-foreclosures
It's important for you to understand exactly what
pre-foreclosures are and what opportunities are available to you. - Real Estate Investing in Wholesale Properties
- Why Success Isn't Pretty in Real Estate?
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