Real Estate Investing | What Is A Short Sale?

What the heck is a short sale? You hear it a lot but have no idea as to what it is.  A short sale is when the property has yet to be foreclosed on, but the bank has agreed to take less money than is owed on the loan to get a payoff on the balance owed. Usually, at this point, the owner of the property has been  doing the best they can to keep the
building up and running. There are minimal, if any, vacancies, but the owner is still losing money for some reason. Banks will realize that if they go ahead and sell the house at a reduced price now, they can avoid having to go through the foreclosure process.

In a short sale you will still deal with the owner of the property. Of course this is done with the bank or lender’s permission. Usually it will be pretty easy negotiating with the current owner since they know it will be foreclosed on anyway. As I have mentioned several times, do your homework, and give the owner and lender a nice “sales pitch” as to why you should be the new owner of the property. Do this along with other information such as a purchase contract and list of inspections that have been done on your potential investment property.

This is another time when your team of real estate professionals can help you a great deal. Your agent can help you get all your numbers and inspections in order to present to the lender and owner.