Hey there, today we’re diving into the world of short sales. Whether you’re a realtor looking to help distressed homeowners or an investor searching for profitable opportunities, this blog post is your guide to understanding and making money on short sales. Let’s get right into it!
Understanding Short Sales
For those unfamiliar with the term, a short sale occurs when a homeowner faces financial hardship and are also upside down on their mortgage. The challenge arises when the homeowner owes more on their mortgage and liens than the actual value of the property. In simpler terms, if they need to sell at $150,000 but the house is worth only $100,000, there’s a $50,000 shortfall.
This is where we, as experts, step in. We represent the homeowners and negotiate with their banks to absorb this loss, allowing the seller to walk away from the property without the burden of the deficiency—the difference between what they owe and the sale amount.
1. Wins for Sellers and Realtors
- Debt-Free Exit: Sellers can escape the financial burden of the deficiency.
- Lender Forgiveness: The lender puts in writing that they forgive the deficiency, clearing the seller of all associated debts.
- No Cost to Sellers: In these scenarios, the lender covers the costs associated with the sale.
- Commission from the Bank: As a realtor, you can charge commissions to the bank, facilitating a win-win for all parties involved.
However, to navigate short sales successfully, realtors must possess the skills to process and negotiate these deals. It’s a unique process, but the rewards are significant.
Now, let’s talk about the exciting opportunities short sales present for investors.
Offering at a Discount:
Investors, don’t let the existing debt deter you. When offering on short sales, act as if the property is free and clear. The lender, now involved in a short sale, is less concerned about the existing debt.
Unlike traditional purchases, investors aren’t competing against numerous buyers. Short sale offers are negotiated directly with the bank, creating an excellent opportunity for investors to secure a property at a discount.
Appraisal Determines Offer:
Once an investor expresses interest, the bank orders a third-party appraisal. The offer is then based on the appraised as-is value. Investors can seize the opportunity to purchase at a discounted rate.
3. Timing and Expectations
It’s crucial to understand that every short sale is different. While the industry average for approval can be over a year, our experience has shown an average processing time of 2 to 3 months from start to finish.
The key to success in short sales lies in knowing what to submit and understanding the bank’s processes. This is where expertise and proper guidance play a pivotal role.
Partnering for Success
If you’re considering short sales as a realtor or an investor, it’s essential to partner with experts who can guide you through the process. Our expertise in short sales has been consistent for the last 14 years, and we’re here to help.
For more in-depth case studies and educational content about short sales and pre-foreclosures, check out Nicole’s books “Short Sales Uncensored” and “How To Master Short Sales” on Amazon or on the website. These can be valuable resources to guide you through the process. Additionally, you can join the Facebook group, The Only Short Sale Group Worth Being A Part Of, to ask questions and gain insights from experienced professionals. Always feel free to reach out to us if you have any more questions or if we can help in any way.
Remember, every lead can be an opportunity, and short sales provide a unique avenue for both realtors and investors to create win-win situations. If you’re ready to explore this exciting niche and collaborate with us, reach out at thessqueen.com or leave a comment. Let’s turn challenges into opportunities and make the most of short sales in today’s market!