Real Estate Amazing Short Sales Profits Part # 2
Amazing Short Sale Profits Part # 2 of 2
Now, let’s look at a situation where there is $100,000 owed on a mortgage and the property has back taxes of $5,000, a 6% real estate commission of $6,000 and repairs of $10,000. On a good day, the lender(s) may net $79,000. Now if the market value has fallen by 10%, then it is worth maybe $69,000, if…the lender can find a Buyer?
Now a sales price of $69,000 may be a fair deal for some Buyers, but not a great deal to a smart Buyer and certainly a very poor one to a wholesaler. So, if a retail Buyer could get this property for $60,000, that would be a much better value and the wholesaler could get for $50,000, that would work for him.
Soooo… how can we persuade the lender(s) to agree to approve and accept a short sale offer from a bad loan for them into a great deal for us? Make them an offer and substantiate with documentation why they should accept it, and that the Buyer is qualified to buy it now. The lender(s) and borrower(s) both at this point just want to “make it end and go away”.
Each loan(s) and lender(s) has certain criteria and guidelines to follow and must comply with. The lender(s), if they feel that there is a reasonable and responsible offer from a serious qualified Buyer, they will engage an appraiser and or a BPO agent to be the eyes and ears for the area and property and will forward their written opinion (appraisal or BPO) back to the lender(s).
The lender(s) will evaluate and then will decide to accept, counter or reject the offer. Additionally if there are two or more lenders on the subject property, the first lender will basically decide what they will take and typically the second may only get $1000 to maybe $5000, very seldom any more.
If the property goes to a public sale, typically anyone behind the first mortgage will lose out. Assuming the lender(s) accept the offer, then a detailed letter of the short sale agreement will be forwarded to the closing office and the purchase and sale will be completed in a typical fashion, with all parties getting what was agreed to.
In the forms section is all the paperwork that is needed to complete a short sale. The borrower(s) cannot negotiate a short sale for themselves and also CANNOT receive back any money proceeds from the closing
To learn more about the amazing profits of short sales, please visit our website or contact us for more in depth information. Questions…please contact me.
About the Author:http://www.truthofrealestate.com/shortsale clint@truthofrealestate.com
Clint Cohen is a renowned national expert and guru mastering in real estate investing and creative real estate solutions. Clint is also a national award winning builder, remodeler and developer with over forty years of successful business operations. Married and a father of two grown daughters and two cats.
Clint has authored several books and has created, written and implemented many proprietary forms, agreements and exclusive paperwork for all his business ventures. An author, writer, reader, teacher, developer, trainer and lecturer complimented with a very expansive and extensive collection of true and real life experiences. http://www.truthofrealestate.com/shortsale
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