OfflineSo in the case of a short sale you are buying the home from the owner but just negotiating the mortgage owed down ith the lender? Do the owners make any money? Do they expect to make money? Or is getting out without a foreclosure and saved credit supposed to be what they get from the deal?
Thanks,
Bryan
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I'm just starting to understand short sales. Here is the what I know. You will take the house and negotiate with the lender to forgive a chunck of what is owed.
Ex.
Owner owes 100,000
You negotiate and now the remaining is 70,000. Take the 70,000 and resell it to a investor for...lets say 90,000. Thats a 20,000 dollar spread. Offcourse you need a team to do this. There's homework to be done also such as comps, title companies ect. I highly recommend that watch this video. And i would love to here your opinion to on this also.
http://www.viddler.com/explore/fixaflip/videos/1/
Here's what I know of short sales...
what you are really providing the seller is a service to get them out of a bad situation by negotiating the short sale for them. No.. the sellers cannot make any money from it.. the lender is forgiving their debt.. actually, there is a chance that a deficiency judgment can be filed against them for the difference in what they owed and the negotiated price so you need to make sure a full satisfaction of mortgage is part of the deal.
short sale is a long process but luckily there are experts out there that you can outsource it to if you wanted or you can learn how to do it yourself.
yes... what the sellers get is a way out of having a foreclosure on their record and ruining their credit.
As an investor..you make your money on the spread (resell price minus the negotiated amount)
Hope this helps.
Alena
The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks, and then starting on the first one.
-- Mark Twain
Alena, according to the new short sale legislation that was passed on 12/1/09 lenders are required to give homeowners a $1,500 at closing to pay for moving expenses. The new administration is trying some new things only time will tell if this will benefit the economy.
Plus another thing to know about the new legislation, banks are required to give homeowners a decision within 10 days. That is going to be bunkers if the banks can turn around approvals or counters, this is supposed to take place April 1st.
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for the homeowner. The home owner MUST continue to make payments on the property during the SS process (which can take up to a year)then the homeowner gets the $1,500. For those with no income or little funds this wouldn't work out.
Lea
SPR Property Solutions, LLC
thank you that video helped me learn a lot about short sales.