A short sale is a great way to get rid of property that the owner can’t afford. In a nutshell, a “short sale” occurs when homeowners behind on mortgage payments get approval from their lender to sell for less than what is owed. Buying a short sale home in Florida has a great share of advantages for all parties.
For investors, this is a perfect deal. You’re able to purchase a property for a heavily discounted market rate. Once your rehabbing work is completed, you’re almost guaranteed a hefty return on investment.
In terms of the bank, they’re able to save time, resources, and money from the foreclosure process. As for sellers, they’re able to quickly remedy their financial situation by removing what is likely their primary cause of concern. It might not always be easy getting this desired outcome, and we’ve put together some tips to help get everyone what they need from buying a short sale home in Florida.
Research Listed Short Sale Homes
Some real estate agents will advertise homes for sale as a “short sale” even if the bank has not agreed to sell it. Disgruntled homeowners are hoping that this strategy will get them more competitive offers. As a result, no matter how negotiations may go with the sellers, it’s unlikely the bank will allow the sale to close.
Go Through County Records
Most of the time, a short sale is a last resort for many homeowners. In order to avoid a short sale or worse, it isn’t uncommon for people to take out second mortgages or home equity loans. Conduct research through the county records for any possible complications such as unpaid taxes or liens. In the case of complications, the property will need to be independently appraised by the lien holders. This process is essential – if any lien holders don’t approve the short sale, the bank won’t allow the sale to close.
Work Closely With the Sellers and Bank
A homeowner’s only chance at avoiding foreclosure is to convince the bank that they are not able to pay off the rest of their mortgage and are making no money from this deal. After that point, it would put you in a position to negotiate directly with the bank.
This is a complicated process. It can take several months for the bank and sellers to agree on a price point to sell at. As we all know, banks don’t have a very high sense of urgency, so this takes great patience. Also, it applies a lot of risk to the sale – you’ve likely already invested time and money into this sale by now.
There’s many ways that buying a short sale home in Florida can go wrong, but it doesn’t have to be difficult for investors anymore. Working directly with local wholesalers like Florida Property Warehouse will save investors time and money. We use our marketing efforts to acquire highly discounted homes and pass those savings on to you. Reach out at floridapropertywarehouse.com or call at 407-974-3270.