5 Ways to Win Short Sales with Hard Money
Come October 2012 – Things are changing in the Short Sale marketplace.
As noted in the MBA Newslink 9-4-12
“While distressed borrower typically must be behind on mortgage payments to qualify for a short sale, Fannie Mae and Freddy Mac are relaxing the requirement for those who meet certain hardship criteria. Beginning in October, 2012, homeowners who are current on payments but are struggling due to job loss, divorce, long-term disability, a business failure, a natural or man-made disaster, the death of a primary or secondary wage earner or a change in employment that is more than 50 miles from the current residence may be eligible for assistance through a short sale…Banks are taking advantage of these Short Sale offers by Fannie and Freddy with 23 percent of all housing sales being Foreclosures in Jul, 2012 with 18% of those sales being short sales that occurred before the foreclosure process was initiated.” Source: MBA Newslink 9-4-12
As a Real Estate Investor, how do you take advantage of the increased number of Short Sales?
We all know that many Short Sales have multiple offers and a cloak of opaqueness around the bidding and approval process. There are 5 proven ways to Win these Short Sale bidding wars with Hard Money:
1. Pre-Approval Letter from a Reputable Lender
2. Provide a Proof of Funds to the Selling parties
3. Show an Excellent Track Record of the Lender
4. Meet the Short Sale Closing Timeline
5. Communication with all mortgage broker, Realtor, lending and Government Sponsored Enterprise (GSE) parties involved
Recently, a distressed Single Family Residence was available via Short Sale in Southern California. The Seller had experienced one Escrow falling out after another. The Selling Bank, Asset Manager and Realtor decided to accept a bid from the experienced Fix and Flip buyer with a Pre-Approval letter from a Private Money Lender. Proof of funds was provided to show the buyers ability to close the transaction quickly. All due diligence, inspections, Title, Escrow and documentation was performed within 7 days and the transaction closed on the day before the Short Sale Deadline. The buyer/borrower/Real Estate Investor now had his Fix and Flip opportunity and was off to Home Depot!
Knowing a fast and professional Hard Money Lender is one of the best ways to make the Short Sale buying process productive, easier and financially rewarding. If you have any questions about short sales and how you can earn more money doing Fix and Flips from Short Sale opportunities using Hard Money loans please give us a call.