When you’re a homeowner and you’re facing a foreclosure it can be a very unpleasant circumstance. You’re probably thinking about all the hard work, time, and money you’ve invested in a property that you feel you are forced to surrender. It can be a sad time as you look at your prospects. However, if you’re a buyer of a short sale property things can look very different. Looking at the deal from an investor’s viewpoint allows you to see high potential in taking advantage of this possibly lucrative opportunity. Still, there is always a possibility that things can go wrong so when you’re ready to enter a short sale transaction here are a few tips that will give you better leverage and a higher chance at success.
It’s true that the lender is willing to take a loss but that doesn’t mean that they’re in a position where they’re forced to accept what you have. Make sure that when you place your offer for the property that you have submitted everything the lender has asked for. Keep in mind that it is not the seller that you have to impress but the lender who is trying to recoup as much of his losses as possible. The more thorough you are in the details provided to the lending institution the more likely they will give you the attention you deserve.
Know the Current Market Value
Before you make any type of proposal you should be very clear on the current market value of the property you’re considering and design your offer to be within a reasonable amount of its present value. Your first offer will tell you whether or not it’s in the right ballpark. If after your offer is presented the lender asks for an appraisal of the property you are on your way but if they come back asking you to raise your offer you know you’ve missed your mark and further negotiations may not be so forthcoming.
Be Prepared to Close
If your offer is accepted you need to be prepared to close immediately. There should be no reason for you to have to ask for extra time to pull your assets together. Closing within 2 – 4 weeks is a reasonable amount of time, anything over that may not be easily accepted and asking for an extension may put you in a bad light in the sight of the lender. If this is your only property that you plan to purchase then maybe it’s okay if the lender is a little annoyed but if you plan on using the property as an investment tool and expect to put it on the market for resell anytime soon a delay in closing could lead down the line to more problems.
Short sale properties can be an ideal opportunity for a savvy real estate investor but it does require a little forward thinking and careful planning on your part. With a little persistence and patience you will be well on your way to a future as a real estate investor for just a small fraction of the price you would normally expect to spend on the property you choose.