The housing market is flooded with sellers who need to sell quickly to avoid losing their home to foreclosure. As an alternative to foreclosure, many homeowners are electing to go to a short sale as a way to settle their debt with their lender. A short sale is a settlement of their mortgage at a lesser rate than was originally agreed upon. In essence the bank is agreeing to take less for the payoff than is actually due on the mortgage. The key to making this process work for the homeowner is selling in the least amount of time possible. In a short sale the offer that you make must be accepted by the bank and not the actual homeowner but it can result in you getting a property for well below market value.
Even though this is a slightly different process of submitting an offer and getting it accepted, the process that you need to follow before making the offer is the same as with any investment property. You need to know what the actual market value of the property is, which you can determine using comps in the area. You also need to access the current condition of the property to determine the cost of any repairs or renovations that you will want to make. These numbers then need to be plugged into the formula that you use to determine if you can sell for a profit. If your numbers show a strong enough return on investment, then make the offer and wait to hear from the bank.
Being that the bank is going to evaluate your offer, the response time would be much longer than a convention sale to the homeowner. And the bank could counter offer or completely reject your offer. If your best and final offer is rejected then you are wise to move on to another property which would be a more sound investment and hold a better potential for profit.
You can search the internet to find listings for short sales or you can turn to a company which specializes in real estate investment purchases, short sales and selling distressed properties. Visit www.azrealestatewholesale.com to learn more about a reputable real estate wholesale company in Arizona. You will find that having an expert in the industry working with you will make the process much less stressful and challenging. Pursuing short sales can add time to the process and every one of your offers might not be accepted. But the offers that are accepted will hold great potential for a good return and a strong profit margin. The key is having a professional to assist you in the process and to help you select the best properties to purchase.