Listed below is what you need to know to get started on your search for real estate deals:
1. Know what you want: Type of Property, Location of Property and the Maximum amount you want to spend
2. Do your research on mortgage lenders ahead of time. Get a mortgage pre-approval. Real estate agents and banks will not consider any offers without a pre-approval letter from your mortgage lender.
3. Patience – It takes 3 to 5 months on average for an approval from the seller’s mortgage lender. A short sale requires the lender’s approval on accepting less than the balanced owed on the seller’s mortgage.
4. Most importantly you must work with a real estate agent experienced in short sales. Find out how many transactions your agent and the seller’s agent have closed. Ideally that number should exceed 15 closings. Experienced real estate agents will know if there is a good chance of obtaining an approval from the lender and will also know how to go about obtaining that approval.
5. The best real estate deals will involve properties that need some work. It’s best to have some extra cash on hand to make the repairs needed to convert the property to ‘move in” or “retail” ready.
6. Most approvals require settlement within a 30 to 45 day timeframe.
7. Who is negotiating the short sale? If the real estate agent representing the seller has hired a 3rd party negotiator they will likely expect the buyer to pay this fee. Most buyer’s mortgage lenders will not allow a buyer to finance this fee as part of the loan amount and therefore you will need additional cash to cover this. This can cost a buyer as much as 2% – 4% of the sale price. This “extra cook in the kitchen” and the cost associated with that often harm the likelihood of getting an approval..
There are no guarantees a short sale will be approved which is why it is so important to work with an experienced short sale agent. The length of time it takes for an approval and the fact there are no guarantees of an approval is one reason short sale listings would be priced attractively from the start. Many folks aren’t willing to wait for an approval and also aren’t willing to risk finding out months down the road they did not get the property because the bank did not approve the short sale.
I have closed over 65 of these transactions and would be happy to assist you in finding your real estate deal. For more information about me and my services check out my website at http://www.yourhomerunexperience.com or http://www.ricksheppard.com. or email me at [email protected]Share on Facebook