Purchasing a Short Sale Home

Purchasing Short Sales

If you’re considering purchasing a short sale home, find out how to maximize your profits and minimize your risks.

Today in “Purchasing a Short Sale Home,” the topics we’re going to cover are:

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What’s a Short Sale in Real Estate?

Is it a good idea to buy a short sale? Purchasing a short sale home can be a lucrative investment

A lot of people make money by purchasing short sales, but they also know what they are doing and how to do it. There are some risks, but these can be minimized with some due diligence on your part.

A short sale is when a home is sold for less than what is owed on the mortgage. This means someone is going to lose money, at least on paper. The bank is going to try to minimize the loss.

The property may go to a competitive bid if more than one person is interested in the property. Because the bank is looking at this long term, a person with better credit and a better ability to pay off a loan could get the property with a lower bid than someone with lesser credit. Someone with cash could come in with yet a lower bid and get the property.

Do Your Due Diligence Before Buying a Short Sale Property

A homeowner can’t just decide to short sale. He must get approval from the bank.

Purchasing a short sale home means looking at the mortgage paperwork. If the bank won’t agree, no short sale. Even if a real estate agent says a property is on a short sale list, you want to verify this with the company holding the loan.

Bankruptcy means a short sale can’t happen, unless ordered by the bankruptcy judge. Bankruptcy puts a halt to collection efforts on bills the homeowner has. Homeowners do not know that a bankruptcy stops a short sale.

Sometimes the bank won’t find out about the bankruptcy until after short sale proceedings are started. Make sure the homeowner hasn’t done this and does not plan to do so.

Some lenders require a homeowner to be in default on the mortgage. Some do not. Finding this out is part of the due diligence in purchasing a short sale home.

Purchasing a short sale home is made a lot more complicated by Second mortgages. Instead of one lender, there are two that have to be negotiated with. If one says no, the deal can’t go through. This doesn’t mean the sale can’t go through, but it’s likely to take a lot longer.

Get an Inspection Before You Buy a Short Sale

get an inspection before purchasing a short sale homeWhen you’re purchasing a short sale home, sometimes you’ll be allowed to inspect the property, sometimes not. Just because you do inspect it does not mean the house is going to be in the same shape when you take ownership. The homeowner may get mad and take frustrations out on the house in between your inspection and the closing.

What you can do is take pictures of the house and try to get the bank to guarantee the home is still in that condition at closing. You may also get to do an inspection after the family moves out and before closing. If you can’t inspect in person, hire someone to do it for you. A few dollars here can save a lot down the road.

Other things to look for that may not be as obvious are leaking roofs, termite damage, flood damage, age and functioning of major appliances. While replacing a stove is not a big deal, putting in a new HVAC can cost several thousand dollars.

Expect to do some work when purchasing a short sale home. If the homeowner is having problems meeting his mortgage, it’s likely some home maintenance has also slipped.

If repairs are needed, figure this into the total amount you are willing to spend.

How to Find Short Sale Homes

how to find short sale homes to purchase

Of everything involved in purchasing a short sale home, this is the easiest. You can advertise that you buy short sale properties in area media. Generally classified ads are cheapest. For a few dollars you can reach a lot of people.

You can also post similar ads on places like Craigslist. This is free and has a national reach, but you’re not going to reach quite as many people in a given area.

A very effective way to get involved in purchasing a short sale home is to contact real estate agencies and mortgage companies, lenders and banks in a given area. If you can greatly increase your chances of being contacted when these people have a short sale by proving you can buy short sale property.

Conclusion

You can make money from purchasing a short sale home, but you must do your due diligence.

When you’re purchasing a short sale home, look at the mortgage paperwork, and be aware that there could be second mortgages that may also require negotiation.

Make sure the homeowner has not filed bankruptcy, which would put a halt on the short sale.

Be sure to inspect the property and take pictures. Try to get the bank to guarantee the condition of the property at closing in case any damage occurs between the time of the inspection and the short sale.

If you’re interested in purchasing a short sale home, you can find one by advertising that you’re in the market for one. Placing classified ads in newspapers or on Craigslist and contacting realtors and lenders can help you find short sale homes.

If you’d like to know more about purchasing bargain real estate, Ted Thomas specializes in distressed property investing. Ted has decades of experience purchasing short sales, foreclosures, and tax defaulted real estate.

Over 30 years ago, Ted Thomas discovered tax lien certificate and tax deed investing and concentrated his focus there after realizing how lucrative is and that it is recession-proof.

Tax lien certificates pay returns of 16%, 18%, 24%, even up to 36%, and tax deed properties can be purchased for 10, 20, or 30 cents on the dollar.

Ted Thomas is America’s leading authority on tax liens and tax defaulted property investing. He is famous for showing students how to make 6-figure incomes within a year of completing training.

Ted Thomas is the only one who provides full support with live tutorials on research and auction preparation, Q&A webinars with experienced certified coaches, one-on-one coaching programs, live web classes and workshops, and home study courses.

If you’re serious about investing in bargain real estate, 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.

purchasing a short sale home by Ted Thomas

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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Ted Thomas

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.

The Ted Thomas Difference:

  • Ted is recognized as America’s Tax Lien Certificate & Tax Deed Authority and has been helping people with investing in tax defaulted properties for over 30 years.
  • Ted has built a team of certified coaches that have 70 combined years of auction experience and are available to his students by phone to guide and mentor you to avoid getting overwhelmed or worse, losing money
  • Ted has ironclad PROOF that what he is teaching you does work. With hundreds of successful students providing testimonials and a 4.9 Google rating which is unheard of in this industry.
  • Ted and his staff don’t hide behind a website; they can be reached during office hours at 321-449-9940.

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