There are many ways of making money in real estate. One of the ways is buying and selling property. For short selling to occur, there should be a mortgage holder who is having problems paying the mortgage installments. Short selling in real estate refers to buying a mortgaged property at a price below the outstanding debt balance. This arrangement is reached when the lien holders (mortgage provider) agree to take a lower amount as payment than the total amount owned. This will lead to a deficiency. Due to the low prices, there is an opportunity for making profit by buying the property at these low prices and later sell it at a higher price. This article will guide a real estate investor on how to go about short selling.
The first step is to find property that is at pre-foreclosure. You can get this information from real estate agents, the internet or the local court house. When doing the search, ensure the properties you are looking at are those which are not in the foreclosure stage and those which have a high outstanding balance as compared to the market value of the property. Once you have identified the ideal property, you can get the name and contact details of the owner so that you can contact them to express your wish of buying the property.
If the property owner responds positively, create time to visit the property so that you can inspect it thoroughly. Depending with the condition of the property, you will make decision of whether you will have to repair the property once you buy it or whether you have to demolish it to build a new one. This visit is important in that whatever costs you foresee incurring should be factored in the purchase price you settle on. You may need to engage the services of a professional valuer to help you come up with a better decision. Alternatively you can visit Your Personal Financial Mentor for tips on what to look out for.
If you are satisfied with what you have seen, contact the bank which issued the mortgage to express your wish of buying the property. When contacting the bank, seek to speak to someone who has authority to make decision on the property.
You can proceed to present your written offer in good time before foreclosure start. Based on your own valuation, make an offer that will ensure you make money, after all the debt was turning bad so the bank is not in an advantageous position to push you to a corner.
Also you can find more short sale tips from this video:
Categories: Real Estate