ANSWER: This is the simple part. A “Short Sale” is simply a term used by investors, real estate agents, and lenders where a lender agrees to accept an amount less than the total owed by the borrower. PERIOD.
There’s not enough room in this article to cover all the bases; however here are some ground rules and some tips.
- Your Seller MUST be in agreement with it and you must use common sense… The lender usually does NOT want your seller to get a nickel if they are discounting the pay off on their loan. (make sure your purchase and sale agreement or contract states your seller gets zero)
- Many lenders simply “service” loans for other lenders. You might be banging your head against a wall.
- Many loans are “government backed.” FHA, VA, Fannie Mae, and Freddie Mac… if the lender can simply turn it back it and get all or most of their money… what is their motivation to discount it a penny. Don’t waste your time on government backed loans. The lender doesn’t care because they can just cash out after the foreclosure process. (This is exactly how HUD properties are created.)
- Short Sale process is a time eating, slow, painful strategy to acquire investment properties. Do not rely on short sale success to buy your groceries and pay your electric bill.
- MOST of the time, there is a LIST of things to do and documents that must be received by the lender before you can play the Short Sale game. Here’s the frustration. Each lender can make up their own set of rules and procedures.
He who has the CASH makes the rules.
Education is Cheaper than the School of Hard Knocks
ALWAYS use an Expert Real Estate Attorney for Your Closings!
NEVER do Kitchen Table Closings!
Keep Cranking It 24-7!
Mike Butler
Posts
