Friday, April 30, 2010

Short Sale Tips By Deb McMillan

In today's tough economic times, there are many ways to lose a home. But signing away ownership of your home can be embarrassing and destroy your credit.

For those who can no longer pay their mortgage payments, there are alternatives to foreclosure and bankruptcy. One of those alternatives is "short sale."

A "short sale" is a sale can happen when the outstanding loan against a property is more than the market value of the property itself. The bank will agree to take an amount under the amount owed for payoff. And a short sale can only take place if the buyer, seller, and bank all agree to the terms.

If you are a real estate investor looking to help a homeowner with a short sale, the best tip, I can give you is to remember you are working with a homeowner is losing their house. Treat the person with respect and keep your word. Work your hardest to get your homeowner the best deal possible.

Below you will find several more short sale tips for selling and buying

1. Value of the property: Have a real estate agent perform a Comparative Market Analysis (CMA).

2. Figure out the costs associated with the property. A few to consider include calculate advertising costs, any broker fees/commissions you may occur, closing costs, and don't forget any lawyer fees.

3. Total Loan Value so you know how much is owed

4. Consider hiring a lawyer: Legal advice is always good. Find a Buyer

5. Involve Lenders: Let them know you are interested in doing a "short sale". Sometimes you will need to call several lenders who will jump on this deal
Tips for Buying
The tips for buying are very similar to buying
1. You will want to contact both a Real Estate Lawyer and an Accountant for advice and tax ramifications.
2. Contact lenders: You want to make sure you talk with the individual capable of making decisions.
3. Submit Letter of Authorization: You will receive better cooperation if you write a letter giving permission for the lender to talk with specific parties about your situation.
4. Preliminary Net Sheet: This sheet is an estimated closing statement that shows sales price, what you are expected to receive and all the costs of the sale, unpaid loan balances, real estate commissions, late fees and outstanding payments due.
5. You will also want to include the following: Hardship letter, Proof of Income and Assets, and copies of Bank statements.