FREE REPORT----------How to Keep from Getting Ripped Off When you Buy a Short Sale
FREE REPORT
How to Keep from Getting Ripped Off When you Buy a Short Sale
By John Rainville, Broker, Realtor®, CSP, RECS, LTRS Certified
As banks foreclose on several homes in the area, buyers will find some amazing garage-sale priced homes; but buyers have opportunities to buy homes through a "short sale" before a home goes into foreclosure.
What is a "short sale?" A short sales may be defined as the sale of a foreclosed home at a price less than the existing mortgage balance; however the ultimate price of a short sale lies in the willingness of the bank to negotiate terms. This is a complicated process and,up until now, has rarely occurred. Short sales will without a doubt be prevalent in the next year.
It is good advice to consider hiring professional help when you are looking to buy a home. There are so many legal loop holes that the average person could be taken advantage of. Realize that the majority of lawyers and real estate agents have little experience in these sales. In order to be successful, you need to be very careful in who you select to be your helper. The most important point to consider is: Going it alone when purchasing homes in foreclosure will significantly increase your chance of failure at the bank.
The steps in the process are:
Locate homes which are in default, as early as possible, even possibly before the formal non-judicial foreclosure begins.
Search foreclosed homes with plenty of lead time before the Trustee's Sale (you may need weeks or months of lead time.)
Once you have created short list of such homes, narrow that list to only those homes you would likely purchase for yourself.
Complete an accurate Comparative Market Analysis (CMA) using sold homes with similar features, via a good database such as the local MLS.
Determine the exact mortgage balance and status of default or foreclosure.
Be sure to find out if there is a second or third mortgage on the house.
Research the possibility of other liens (tax liens, mechanic's liens, labor liens, state liens, etc.)
Determine how best to talk and negotiate with the loss mitigation department of the bank or mortgage holder (email, fax, phone, etc)
Determine whether or not purchasing via the short sale will negate any subordinate loans or liens (another trap for the unwary.)
Know which costs and fees in addition to the mortgage balance can be compromised and by how much (experience is the best teacher.)
Prepare a comprehensive package to present to the mortgage holder, which is the most critical step in closing a short sale. This should include the Purchase & Sale Agreement, and a thorough analysis of the home, prices, the local market, and justification of your offering price. Your offer must be prepared very professionally or the bank will merely overlook you, without giving your offer a second look. You have to be able to make a case to the bank, as to why they should sell to you at this price.
In order to close on a deal in a short sale, you must follow through with all parties involved.
The complexity and difficulty of closing short sales should never be underestimated, even under the best of circumstances. It is hard to find a buyer of foreclosure properties through the short sale process, despite what con artists would like you to believe. You should have some experience before purchasing foreclosure properties. The reckless need to be aware of entrapment.
Buying a foreclosure may be a fast way to lose money if in the process you make major mistakes. On the other hand, because the purchase price is below the current market value of the home, it can be a great way to pick up equity immediately the day of closing. Many people have also come to a dead end with this process after months of frustration.
If you are thinking of doing this, contact me and I will get you on the right track. At this time you need to have a FICO credit score of at least 620 to get a mortgage, unless you have some cash saved. I have a contact who can help you get your credit cleaned up if you need it.
If you are serious and motivated to get in a home now and get the buy of a lifetime --- call me!
John Rainville, Broker, Realtor, CSP, RECS, LTRS Certified
PA State License # RM-419701
My cell phone is the best number to call me on (717) 554-7430
BrokersRealty.Com
(888) 774-8488