Will the short sale fever continue in 2012? Executives at Bank of America said last year that the bank closed about 40,000 short sales in 2009 that number jumped to 93,00 to 94,000 in 2010. By 2011 Bank America had closed more than 100,000 short sales and predicts 60% Increase in 2012.
Here are a few tips for someone purchasing a home on a short sale to the seasoned investor investing to purchase a property. Let’s first take a look what is a short sale. Short sale means the seller owes more money to the bank than what they can sell for in the current market, so the seller is essentially asking the bank to take less than what is owed. Note that a lender will accept a discount instead of repossessing the house if you justify that the bank will net more from short sale than by opting to foreclose.
Show the bank that your offer can save them money and time, after all costs have been factored including:
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Legal fees
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Repairs
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Current taxes
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Taxes in arrears
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Current interest
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Interest in arrears
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Insurance
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Insurance in arrears
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Real estate commission
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Holding costs
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HOA fees
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Eviction cost
Keep in mind that the banks are not in the business of owning properties and if you can show them that your calculation is close to the net REO sale price and you can save them time, your offer stands a chance of getting accepted. Finally, write offers containing language that makes the offer subject to the buyer’s acceptance after the bank accepts the offer. It lets the bank know that the buyer has submitted multiple purchase offers and lets you cancel the contract should another offer you made gets accepted first. For more information always consult your attorney. In short, your short sale purchase can save you an estimated 18% savings of a median price home.
Tracey Hartson REALTOR® - No Promises ..... Just Results!
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