10 Frequently Asked Short Sale Questions

1. What happens to the seller's credit rating when they allow an investor to short sell their property?

What typically happens is the loan will show up as "paid" on their credit report; however there will be a notation that says "settled for less than originally owed" or something along these lines. It is more favorable for a homeowner to short sell than to have a foreclosure on their credit report.

2. Where do you find investors for Short Sales?

Depending on where you live, you may see investors who advertise with bandit signs or in your local newspaper. Call the investors directly and ask them if they are experienced in doing short sales and if they would be interested in working with you. Another good place is your local real estate investors club meeting.

3. Define Short Sale?

A short sale is really a form of pre-foreclosure sale and occurs when the mortgagee agrees to accept less than the loan amount to avoid foreclosure. A negotiated short sale results in a discounted purchase price for the buyer. The buyer would finance the acquisition much the same as in any conventional realty acquisition... but without the luxury of time.

4. Can an owner profit from a Short Sale?

The seller cannot profit (monetarily) from a pre-foreclosure short sale..But there are always exceptions to the rule.

5. How do bankruptcies affect the possibility of doing a short sale?

Most mortgagees won't consider a short sale if the homeowner is in bankruptcy...why? Because negotiating a short sale payoff is considered a collection activity. Collection activities are prohibited in bankruptcy.

6. Can somebody tell me what documents do I have to include in a Short Sale package?

Documents depend on the lender. Each lender has different requirements. It is typical to require hardship letter, purchase and sales contract, ECOR,settlement statement (HUD 1), net sheet, pay stubs, bank statements,personal financial sheet (monthly budget), amongst other things.

7. What percentage of mortgage companies send someone out for an appraisal on a possible short sale?

All lenders order a BPO or full appraisal of the property before making their decision to accept or reject the short sale offer. This is there only way of assessing the value of the property.

8. How late in the pre-foreclosure process can you start a short sale?

Try to allow a window of at least 90 days to effectuate a mortgagee approved, pre-foreclosure short sale.

9. What is a Due on Sale Clause?

"Due on Sale" Clause (DOS) Provision in a mortgage or deed of trust calling for the total payoff of the loan balance in the event of a sale or transfer of title to the secured real property. A contract provision which authorizes the lender, at its option, to declare immediately due and payable sums secured by the lender's security instrument upon a sale of all or any part of the real property securing the loan without the lender's prior written consent. For purposes of this definition, a sale or transfer means the conveyance of real property of any right, title or interest therein, whether legal or equitable, whether voluntary or involuntary, by for deed, leasehold interest with a term greater than three years, lease-option contract or any other method of conveyance of real property interests. Standard language which states that the loan must be paid when a house is sold.

10. Will banks allow a short sale when the owner has some or a good amount of equity?

If a property has what the lender would consider a substantial amount of equity, chances are they would consider allowing the property to foreclose and then reselling it closer to the retail value. Focus on homes that do not have much equity. Your job will be to create the equity in the home by negotiating a successful short sale.

Mr. Fowler has been a real estate investor for over 15 years specializing in the area of pre-foreclosure/short sale investing. He has bought and sold over 200 homes in Georgia, Florida, Louisiana, and Tennessee using the same short sale techniques that he teaches in his course, Making Money with Short Sales: The Complete Guide to Acquiring Property Pre-Foreclosure. Mr. Fowler currently resides in Atlanta Georgia. He also spends many hours per month teaching his creative real estate investing techniques to other aspiring investors across the country.

http://www.ShortSaleDeals.com

---

How to Qualify For 90% Plus Commercial Financing!!!

There are three important questions that you must understand and... Read More

Good Tenants - Learn Twelve Ways Landlords Keep Them

Happy, Long-term Good Tenants Paying On Time How to Create... Read More

Home Buying Checklist ? Windows

If you are in the market to purchase a home,... Read More

The Real Estate Bubble-When Will it Burst?

More and more individuals are realizing that real estate is... Read More

A Real Estate Investing Primer

There are a great many books and web sites devoted... Read More

Seller Objections To Lease Purchase

A large percentage of the mail we receive are from... Read More

Looking into Buying Mobile Homes?

To own a home is one of the dreams every... Read More

High Tension for the Buyer and Seller of Real Estate Can Be Reduced

Tensions can run high in both the selling and buying... Read More

Staging® Your Home for Sale: a Superior Real Estate Home Marketing Technique: Part 1

Every Realtor KNOWS that a home should be shown in... Read More

RESPA: The Real Estate Settlement Procedures Act

The Real Estate Settlement Procedures Act (RESPA) is a consumer... Read More

How Real Estate Investors Use Mortgage Note To Purchase Properties

Many of you may not be aware of the various... Read More

The Art & Science of Property Valuation -- Automated Valuation Models

It is no secret that sellers want to sell high... Read More

Understanding Opportunity Cost When Investing In Property

While most investors have got involved in property investing because... Read More

5 Factors of Selling a Home

There are five major factors to consider when selling a... Read More

The Echo Boomers - The Next Big Consumers

The Echo Boomers or Generation Y currently make up about... Read More

10 Important Tips to Successful Real Estate Investing

When it comes to investing, everybody has certain goals and... Read More

Real Estate Bankruptcy

Although real estate bankruptcy cases no longer dominate the bankruptcy... Read More

Rapid City Real Estate Agents

Take me Back to the Black HillsLocated in Western South... Read More

Five Things to Help Sell Your Home Fast, and For More Money

Selling your home requires some thought and a clear plan... Read More

Virtual Agent? Online Real Estate

When preparing to sell a house, you should always consider... Read More

Home Inspectors: 5 Tips to Choosing the Right One

Choosing the wrong Home Inspector can cost you a lot... Read More

Appraisal vs. Market Value: How to Avoid Pitfalls in the Sale of Your Home

When you sell your home, appraisers use comps (comparable market... Read More

Pricing your House to Sell

Most Sellers set their initial asking price at an amount... Read More

Achieving Positive Cash Flow from Your Real Estate Investments

Even if you're counting on rising property values to eventually... Read More

Buying A Home ? Zoning and Architectural Review Board Restrictions

When you buy a home, you need to be aware... Read More

Curb Appeal

First, lets start with what it is. Curb appeal is... Read More

Free Tips That Will Dramatically Increase the Selling Value Of Your House (Part 1)

Did you know that it's a proven fact that a... Read More

Farm Expired Listings For Big Commissions

Many real estate agents begin and sometimes sadly end their... Read More

Is Housing and Real Estate Bubble Hype Irrational Exuberance?

Not so, says the author of this article and four... Read More

Real Estate Business

Starting real estate business is not that simple. Multiple aspects... Read More

A Powerful Suggested Technique for YOUR Home & Property Search

A Powerful Suggested Technique for YOUR Home & Property Search... Read More

Home Inspection Checklist - Home Inspectors

Although architectural details, wall and floor coverings, modern conveniences and... Read More

Selling Houses: Psychological Effects of Landscaping

Buyers think they care more about the inside of the... Read More