Real Estate Investor Negotiation Tools for Closing More Short Sales
Real estate investors looking to lock in the best deals on short sales will find arming themselves with the following facts ideal for signing up hesitant sellers and the best properties.
While short sales may not always be ideal for flipping real estate and investors need to be careful not to get involved in what could be considered ‘short sale fraud’, these properties do often offer some of the most significant discounts. On top of this they also frequently provide far more protection in cleaner titles and homes which are in much better condition than other types of foreclosures.
Unfortunately, despite short sales normally being the best option for most underwater homeowners many are paralyzed with fear of taking any action or resistant to any offers to buy their homes. Armed with the following facts investors should be able to break down these barriers and negotiate the best prices on short sales. This can be done when making an offer or used to set up the offer through direct mail or email.
6 Reasons Homeowners need to do Short Sales Now:
1. Credit Implications
While the effects of a short sale on credit scores has been debated credit bureaus and modeling agencies including Fair Isaac and Experian have recently broken their usual silence to explain the effects of mortgage delinquencies on credit. Among these releases they have commented that those which opt for short sales and for which lenders report no outstanding delinquency may see a less significant drop in credit score and a faster rebound.
2. They Can Buy another Home Sooner
Depending on the details of the short sale homeowners can qualify to buy a new home within a couple of years or even right away. With rents raising quickly across the country it may soon be far cheaper to buy everywhere.
3. Minimizing Taxes
The Mortgage Forgiveness Debt Relief Act ends this year meaning homeowners opting for short sales after 2012 could be hit with incredibly huge tax bills. On top of this there are billions of dollars in other tax programs ending at the end of this year which could multiply this effect.
4. Expiring Payout Offers
Many lenders have been paying out tens of thousands of dollars in cash incentives for homeowners to complete short sales on top of mortgage forgiveness. Unfortunately, as with Bank of America’s offer of up to $20,000 which ends in August 2012 other programs are likely to fade away too, meaning no money for relocation and potentially still owing on the mortgage after the bank has seized the property if short sales are not completed in the next few months.
5. Buyers are Interested Now
There are interested buyers and investors like you in the market now but as mortgage interest rates and home prices raise it will be far less attractive to buy and fewer individuals will qualify for loans. Waiting could make it much harder to sell.
6. Faster Processing Times
Right now lenders are speeding up short sale processing times and armed with transactional funding investors can close very quickly.
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