Ted Thomas, an internationally known short sale expert, explains some tricks of the trade to those looking for a short sale expert. As with many things in life, experience plus knowledge can turn you into an expert.
Today in “Looking for a Short Sale Expert?” the topics we’re going to cover are:
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What is a Short Sale in Real Estate?
I’m Ted Thomas, and here’s some advice I give to people interested in knowing more about this part of the real estate world. Whether you are a buyer or a seller, understand a short sale is not a foreclosure.
A foreclosure is a legal process by which a lender takes possession of a home. The owner is moved out, and the bank owns the property.
In a short sale, the owner sells the property to someone else. The bank has to approve the deal, but never takes the property over. A foreclosure is also much worse on a credit score.
As a short sale expert, I have seen sales close rapidly, and I have seen them take a long time. I’ve also seen some short sales get right to the wire and be stopped or fall apart.
Whether you are buying or selling, expect the sale to move slowly. The bank is going to look for other buyers. It may continue to consider a foreclosure. The lender is certainly going to try to lose as little money as possible.
This delay is extremely frustrating, but it is part of the process. It’s even worse when the deal doesn’t close at all.
Since the object of a short sale, for the homeowner, is to get out from under the mortgage as soon as possible, hiring a short sale expert agent can be a good idea. This person has conducted sales in the past and likely has a list of people who invest in short sale properties.
The agent is certainly familiar with how one of these transactions is conducted and can help you get the paperwork together and negotiate with your bank.
If you want to be a buyer, contact a short sale expert and ask to be added to his or her list of investors. The expert will keep track of short sales and let you know when a prospect comes up.
Short Selling Your Home
Every short sale expert I know agrees there are three criteria you must meet to qualify for a short sale. There are other factors which may come into play, but these three are the minimum.
1.) You must have an underwater mortgage, for example mortgage over property value. If your house is worth more than you owe, the bank will never agree to a short sale. As long as you owe more than it is worth, the lender will at least consider a short sale.
2.) You can’t continue to make the payments. This does not mean you are late or behind on payments. A good example is an adjustable-rate mortgage and the payment goes up. Losing your job may also qualify you for a short sale on this point.
3.) You can’t be eligible for a loan modification. If you’ve applied for a loan mod and been denied, this works in your favor.
Before agreeing to a short sale, the bank is going to want proof of all three of these in writing. A short sale expert can help you prepare these documents.
The bank is also going to take some time to review this paperwork before making a decision. The lender is looking at taking a loss, at least on paper.
This kind of sale helps you avoid bankruptcy and foreclosure. Of the two, bankruptcy is worse for your credit report. It stays on the report for 10 years. In most cases, the foreclosure is only there for seven years.
A short sale is going to hurt your credit, but not as badly as the first two.
Negotiate the deficiency. That is the difference between what the home sells for and what is owed.
Some states don’t allow a bank to pursue a deficiency judgment. Some do.
A short sale expert agent will work on your behalf to convince the lender to write off the unpaid balance. Remember, the agent has experience at this kind of thing and knows what the mortgage holder will be more likely to accept.
Buying a Short Sale Property
Property in a short sale can run the gamut from move-in ready to a complete wreck. Some people heading into a short sale take their frustrations out on the house.
Sometimes this damage is obvious, like holes in walls and broken bathroom fixtures.
Sometimes, it is less obvious. Pipes under the counter and under the house cut and the water left to run. Wiring pulled loose through the outlet holes.
The seller might not even know about some kinds of damage. Termites come to immediate mind.
A short sale expert may not be a home inspector, but will have experience in the things to look for.
Conclusion
We hope you enjoyed Ted’s lesson, “Looking for a Short Sale Expert?”
In this article, Ted Thomas gives some insight into the short sale. Whether you’re a buyer or a seller, a short sale expert can help you navigate the process.
To qualify as a short sale seller, you must have an underwater mortgage, can’t continue to make the payments, and aren’t eligible for a loan modification.
As a buyer, you’ll want to be sure to inspect the property, and a short sale expert can show you what problems you may likely encounter.
Want to know more about bargain real estate? Ted Thomas has been in the Tax Defaulted Property Investment education business for over 30 years.
If you’d like to learn how to buy homes for cents on the dollar, or earn interest rates as high as 36% secured by real estate, Ted Thomas can show you how.
Ted invites you to get started today by taking advantage of this Free Gift. It costs you nothing to take a look at it, and it could be what you’ve been waiting for.
Ted has a unique system that provides students support like no other! Ted has daily guidance tutorials for his students that will show in real time how to find tax defaulted property auctions and how to research properties.
For the serious investor who wants to accelerate even faster, Ted also offers world-class mentorship and one-on-one coaching programs. Ted Thomas is the only one who has the complete training, guidance and support package.
Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.
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