What are short saleforeclosures? They are homes listed for sale before foreclosure begins. In these instances, there is no way that the current homeowners can make their mortgage payments. Foreclosure will occur; it is just a matter of when. Instead of just waiting for the home to foreclose, the homeowner and lender work together to decide on a short sale. The home is listed for sale through either the homeowner, mortgage holder, or a third party real estate agent. The sale price is less than the outstanding mortgage.
Are you looking to profit from the current real estate market? Ask any expert and they will tell you that the real estate market is suffering. Yes, this is true. What they will also tell you is that there is the potential to make money. If you have the needed financial resources or the ability to secure financing, you can profit from the buying of short sale foreclosure homes.
Foreclosure short sales should result in great buys. It is a relatively easy way to make a profit. Are you looking to buy your first home? Do you want to buy a multi-family home to rent for a profit? Do you want to buy, make improvements, and resell a home? You can easily do so with foreclosure short sales. Unfortunately, many first-time buyers assume that they are getting a bad deal. After all, why would a financial lender sell a home for less than it is worth or even less than what the current occupants owe? There are many reasons why.
Time. Each state has their own rules and regulations on foreclosed properties. The process can take as little as a week, but can take many months. Some states also prohibit lenders from automatically evicting occupants. This isn’t a problem with a short sale foreclosure. In most cases, the homeowner and mortgage lender decide on a short sale together. This means that the homeowner will be out as soon as the home is sold and the new owners can move in. Why does a home occupant do this? To protect their credit and avoid bankruptcy.
Ease. As previously stated, foreclosing on a home or another piece of property isn’t an easy process. It takes time, a lot of paperwork, and so forth. Mortgage lenders do not want to deal with this. They want money. Honestly, that is really all they care about. Not only do they want their money, but they want it quickly and with as little hassle as possible. Agreeing to a foreclosure short sale allows this to happen.
Money. As previously stated, mortgage lenders want their money. If it will be two months before they can evict a homeowner, they lose money for those two months. Not to mention the previous months the mortgage went unpaid. When both agree to a short sale, the process starts right away. Typically, a real estate agent is contacted immediately. Yes, it can take time to sell a home, but since the selling price is less than the home’s value, it will sell and likely quickly. This means mortgage lenders get their money. Although not all of it, they get most and without having to wait.
As you can see, there are many reasons why a mortgage lender will agree to a short sale. So, if you see a low priced home available for sale through a real estate agent, a for sale home listed by the lender, or a cheap for sale by owner home, don’t assume you are getting a bad deal. Instead, ask. You may hear that the home is a short sale.
In short, if you are looking to profit from the troubling real estate market, look beyond foreclosed homes. Don’t wait until a foreclosure auction where you may find hundreds of other investors looking to turn a profit. Instead, look in the right places and find foreclosure short sales. You should walk away with a better deal.