Short sale properties can be a great source of income for investors, and a great deal for home buyers.
A short sale is when the bank has approved a loss on a current loan. Generally the current owner is having a rough time financially, or wouldn’t be facing the loss of the property. Difficult times mean tremendous amounts of stress and emotional turmoil.
Managing relationships is always the key to any negotiation.
For the bank, a short sale is an unemotional transaction. An owner may be letting go of a property with great emotional significance. You’ll have to take different approaches with every party in a short sale transaction to get the best result.
In a short sale, you have to get agreement from the owner and the bank(s) involved on the purchase price and the terms. Data is on your side. Look up comps to get an accurate picture of the market and seek out justifications for your offer prior to submitting a written bid.
Getting written permission from the owner to discuss terms with the bank can be really helpful, but check with a good lawyer to make sure you have the correct documents before you ask the seller to sign anything that might violate MA law.
Your relationship skills are important during this process. The bank will often require days, even weeks, to respond to offers and move forward. Often they request additional BPOs (Broker Price Opinions) or modify appraisals, and they sometimes like to involve different negotiators.
It can be intensely frustrating, so prepare yourself and don’t stress.
Get fully approved for any loan you plan to take long before you make an offer. Make sure your lender can close with short notice because once the approval comes for the short sale transaction you need to be ready for escrow.
We secure properties via short sale and we work with many investors and buyers who are looking for great deals on properties in the Boston area. Give us a call (617) 752-1768 or get in touch anytime to find out how we can help you!