When dealing with short sales, the most important work is done before the process of buying a home even begins. Doing some legwork before a short sale allows you to enter the deal armed with the right financing and the information you need to succeed. When approaching a short sale seller, do these things first:
Accurately determine property value. Short sales are attractive because of prices that scrape the bottom of the barrel. Savvy investors avoid getting carried away by the discount. Assess the return on your investment soberly. Too many first-time investors are seduced by the deep discounts of short sales without accurately assessing how much work the property needs to turn a profit. Always keep the strictest of accounts, without inflating numbers or working from best-case scenarios. Being realistic about a property’s return makes buying a home much more profitable in the long run.
Sort out your financing. Short sales are named that way for a reason: time is limited when you enter negotiations. Ensure you have a mortgage lined up before you close. You won’t have time to get one once the sale begins. Without financing, you’ll miss out on golden opportunities. A buyer’s level of preparation before the sale can make or break a great deal.
Find out about the seller. Knowing the property’s seller and their situation gives you an edge when buying a home at a short sale. The seller might be financially distressed and might require extra funds for relocation. That need may be built into their asking price. Determine just what motivates your seller. That way, you’ll have more bargaining power when looking to buy.
Short sales move fast, and keeping all the details straight can be challenging. That’s why extensive preparation is required before the process starts. Pick the right property, understand the seller and watch yourself execute a great investment.
