A short sale can be a very good way of investing in real estate, particularly with the current housing market. In 2008, there were 2.3 million households that received some sort of foreclosure notice, and nearly 1 million foreclosures actually went through. With a short sale, your choice of investment includes many of those houses which are threatened with foreclosure, and in which the homeowner does not want to have the specter of a foreclosure on their credit record.
However, if you have never done a short sale before, you will find that there are some tricks to making it go through smoothly and have a successful outcome for you. These short sale secrets can make all the difference between having a happy experience and having a nightmare in trying to buy the house.
If you haven't heard of a short sale before, you need to know that it is buying a house that is going into foreclosure at less than the amount that is owed on the mortgage. Thus, the amount you pay is short of the normally required amount, giving this process its name. As this means that the mortgage is not satisfied in the normal way, part of the process includes negotiating with the lender to take a lesser amount.
Nonetheless, you will be talking with the owner of the house, and providing him with an escape route from the stigma and credit problems of having a foreclosure on his record. Normally you should be able to get his cooperation because of these benefits.
One of the secrets in helping the negotiation is to make sure that you have documentation in the form of recent sales or a Broker Price Opinion (BPO) to convey to the lender what the house may be worth, to support your offer. You should understand that lenders views vary, and it is up to you to convince the lender that your offer is reasonable so that it may be accepted.
Their are several other secrets that will smooth the path of the transaction, and doing your homework to learn about the process beforehand can save you time and money in the long run.