With the high foreclosure rates, the pressure on lenders to avoid foreclosure whenever possible. A strategy is for the lender to approve the home for sale for less than the mortgage amount. This strategy, called a sale requires the bank loan discount, but it also benefits the lender. It allows the lender to convert a non-performing loan in a smaller loan advantageous and thus avoids having the property sit in inventory for months or even years.
The benefits of sales
Short sales are good for property investors because they allow them to pay less for the property during the pre-foreclosure phase. While the owner may have $ 250,000 on the mortgage, you can purchase the property for less, perhaps in the $ 180,000 to $ 200,000. This new loan allows both the owner and the bank to prevent foreclosure process while still recovering much of the loan value.
How to find short sales potential
With foreclosures at a record of all time, banks are motivated to make sales. This creates a lot of buying opportunities for a real estate investor alert. These opportunities can not be advertised, so that you can work to find deals.
The best time to buy property in a short sale is in the pre-foreclosure. At this point, the bank knows that the property is likely to be a loser on their books. They are motivated to do the work of many. Once the major expenses of foreclosure have been paid, the bank will need to get more money for the property to recoup their losses and expenses.
Search homeowners who are currently in default on their mortgage and are motivated to sell to avoid foreclosure. You can buy a list of those owners or you can find them at the county courthouse. Court records list the owners who have been served with a notice of default. This information is public record, but requires some work to find and compile the list. foreclosure listing service send experienced people to justice palace every day to keep their lists up to date.
Once you have a list of potential sale of properties, contact the owners to discover that they could be interested in a sale. Some will not be interested, but others will be very motivated. Do your homework at this time to be sure you have accurately assessed the value and condition of the property before approaching the bank with an offer.
Find prospects in the short sale is easy if you use a foreclosure list. foreclosure listings do field work for you at the courthouse and provide a list of owners who may be open to a sale. You can make an offer at any time before the actual foreclosure sale occurs. You must act quickly if a property is almost foreclosure sale, but the potential benefits that this penalty.