Short Sales The Equity Creator
Short sales have been in existence for as long as there have been mortgages. Back then there wasn't a term called a short sale; we just called the lender and asked them if they would take a discount. Today is has become much more supplicated and time consuming to get it done.
The short sale is one of the easiest ways to create instant equity where none existed prior to that point. This is truly a win, win situation for all parties involved if done properly.
The first thing you need to understand is that the lender is not agreeing to a short sale for the investor, it is being done for the seller. The seller also needs to justify to the bank why there is a need for the short sale.
Banks will normally ask for a hardship letter from the seller as well as two or three months bank statements, a mini profit and loss statement, pay stubs, the last two years tax returns, a sales contract for the property and a HUD-1 or net sheet as it is sometimes called..
If the payments are in arrears and it has reached the point where the seller has been served with a notice of default (usually 90 days or more) and the house need some repair the seller's chances are much better. The property usually has to be listed with a real estate broker as well.
The hardship letter is a letter written by the lender telling the bank how and why they are delinquent on their payments and the offer that they are submitting to the bank is the best offer that they have received, if in fact that is the case.
Understand that the bank really doesn't want to foreclose on the property if it can be avoided. They will try and work with you if you are upfront with them, telling them the truth and communicate with them frequently. Ignoring the lender or refusing to take their calls only makes matter worse, and it will only make it more difficult to come to an agreement with them.
The bank will also want a B.P.O. which is a broker's price opinion which is normally done by one of the newer brokers in the area. Established brokers are just too darned busy to be messing around doing a B.P.O. there out there making the big bucks even in this down market.
Doing a short sale is totally different that doing a subject to that most investors are quite familiar with. With a subject to you bring the loan payments current if they are in default, the mortgage and note stay in the name of the seller until the property has been sold.
With short sale things are quite different because if the bank accepts you short sale proposal they want to be paid off ASAP. As long as you have a valid contract with a reasonable earnest money down payment they will normally give you 30 to 45 days to close. If you don't have it sold be ready to come up with the needed cash to close the deal.
Don't intentionally use stall tactics to prolong the closing and buy more time for yourself. If you do, the next time you send a short sale proposal to that bank, you can be certain that they aren't going to very receptive to you offer simply because you have lied to them in the past.
You may think I'm being harsh folks, but after almost 35 years in this business I have seen just about everything there is both honest and dishonest. If you in the business of buying and selling pre-foreclosures or any other properties, always be truthful with all parties involved and you will have more referrals coming to you than you could ever handle.
Things aren't getting any better out there for the banks, sellers or investors, but there is a literal fortune to be made by the investors that is willing to help the banks avoid having to foreclose on homes and helping the sellers out of their properties and into something they can afford as well as saving their credit from any additional damage as well.
Related Tags: foreclosures, short sales, preforeclosures, make money in real estate, short sale courses
Richard Reichmann is internationally known as a millionaire maker. He's a leading consultant in real estate and internet marketing strategies that are profit proven.Subscribe to our FREE newsletter Value $147.00http://www.InstantRealEstateWealth.com
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- The Beginning of the Cataloging Code
The first significant cataloging code was published in 1841. The realization that cooperation and s - In the Lap of the Gods 24
Life moved on. Lily became well liked by both students and staff because of her cheerful outlook on - In the Lap of the Gods 23
Does fate decide the future? Is it all mapped out for us, predestined, or can we influence what com - Write Your Memoir: How to Write About What Troubles You the Most
Everyone has a story to tell, and unfortunately those stories aren't always pleasant. What makes me - How Crafty Word Order Can Instantly Improve Your Writing
by Philip Yaffe I am usually very reticent about offering writing tips. Unless they are linked to - You Say Grandpa, I Say Deda
I was born with two grandmothers but only one grandfather. In nature's rules of familial supply and - My Russian American Dichotomy
I was a Russian girl and an American teenager. I had no choice about the first but I tried very har - In the Lap of the Gods 22
This is just an explanation for those who have read some of the other Chapters of, "In the Lap of t - Write a Book: 8 Reasons You Should Do it
Studies have shown that 82% of people want to write a book, but few of these actually ever achieve - Book Review: the Book of Common Prayer
Book Review: The Book of Common Prayer, "My carry-with-me copy is this size, and I recommend it for
Most viewed articles in this category:
- Real Estate Investment - Investing In Commercial Properties
As in any other type of investment, its obviously advisable to do your research well so that the pro - Taking Care Of Acne Prone Skin With Proper Skin Care Products
Although acne has been largely associated with teeners and puberty, the condition is not only confin - Do I Really Need Eight Hours Of Sleep Each Night?
What if you were told that there is no definitive answer for why we need to sleep? Your initial reac - How to Improve Your FICO Credit Score
If you didn't know this already, having a good credit score is more important than having a lot of c - 10 Tips for a Magnificent Memory
"Where did I leave my keys?" "What did I come in here for?" "Your glasses are on top of your head!" - Things You Might Like To Know About Card Companies
If you have a regular income and are 18 or over then you may be able to get a credit card. You will - Bad Breath in Babies and Toddlers
If your baby or toddler has had bad breath lately, not to worry. There are plenty of things you can - Starving College Students No More
The majority of today's college students are extremely Internet savvy. In fact, many of those studen - Cosmetic Surgery Financing: How Can You Get It?
Cosmetic surgery, a branch of plastic surgery, can be quite expensive, especially if you are plannin - Article Marketing, Improve Your Ranking With Links
Article Marketing, without a doubt remains the best free formula for attracting website traffic. At