Important Steps For A Successful Short Sale In Real Estate Investing
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Important Steps For A Successful Short Sale In Real Estate Investing
| Date Added: January 04, 2011 12:49:27 AM |
| Author: shakir@resellerservers.net |
| Category: Real estate & Construction |
| Knowing how to do a short sale is a must for successful real estate investing. There are numerous properties in default or foreclosure, therefore it is necessary to learn how to do a short sale. Follow these simple steps for a successful short sale. 1) Identify a short sale candidate Some properties are good short sale candidates, others are not. To be a good deal, I consider a property that becomes profitable after only 10-20% of the mortgage has been discounted as a good short sale candidate if it has only 1 mortgage. If it has more than one mortgage, the second mortgage can be discounted as much as 70-80% or more. This creates enough equity for making profits. A seller must be behind on their mortgage to qualify for a short sale. 2) Sign a Sale / Purchase Agreement Next you need to sign a contract to buy the house. All lenders require to see this. An Authorization to Release Information form must be signed so the lender can talk to you about the mortgage. This paperwork must be present for any lender to talk to you. A statement describing the seller's hardship must be presented to the lender. Preferably, have the motivated seller prepare a hand-written statement to increase credibility. 3) Fax Authorization to Release Form Call the lender and ask for the fax number to fax Authorization to Release Form. In most cases, you will need to wait at least 48 hours before it registers in their system. 4) Fax required paperwork After Authorization to Release Form has been accepted, ask them what documents they need for a short sale. Get the short sale package exactly as they need it. This information is mostly also available on the lender's website. Fax all requested paperwork. Missing or incorrect paperwork can delay the short sale process for months, so it is important to get it right the first time. Again, it takes about 48 hours to register in their system. he short sale is then allocated to an underwriter who will see it through the end. 5) Follow up This is the most painful phase of a short sale. Most underwriters have hundreds of short sales to deal with. It is therefore important to follow up to make sure you can get an answer soon. 6) Attend BPO appraisal If your offer looks good, the lender will then do an appraisal (BPO). They will ask you to open the property for them. Make sure you attend the BPO appraisal. While you may not influence the outcome of the appraisal, pointing out important issues like roof or foundation repairs can significantly affect the appraisal value in your favor. 7) Acceptance or denial The lender will then accept or deny your short sale offer. You may need to submit a counter offer if your offer is denied. 8) Close the deal Next is to close the deal and follow your exit strategy to make money! Simon Macharia is a real estate investor who has done numerous short sales. He runs his business from an interactive real estate investor website from http://www.realestateinvestorswebsites.net . |
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