You would be better off doing a preforeclosure short sale then to waste time procrastinating only to allow the bank to foreclose and kick you out.

When you find yourself in a tight situation such as foreclosure you really do not want to admit to yourself that the bank is indeed going to take your home.

Your emotional connection will not allow you to fathom the thought of strangers coming in and telling you that you have “x” amount of days to gather all of your belongings and find somewhere else to live.

Especially since your name is on the deed and the house is of such beauty.

pic courtesy of Rhansman

Who do these people think they are?

Well, unfortunately, these people work for the bank, who is the true deed holder, and they have every right to evict you once the judge signs the documents at the court house giving them the o.k. to take possession your property.
Once this happens, there is no turning back.

Very seldom will the bank contact you after the foreclosure and ask if you can help sell the home and that is usually only in very distressed areas.

A preforeclosure short sale can save you two things:

Embarrassment – If you sell the home before foreclosure, then there will be no public notifications that your home was taken away from you. You also will not come home to a big yellow notice on your front door for all your neighbors to see, telling you that you no longer have possession and you now have to vacate the premises.

Credit – When you are only in preforeclosure status the bank is notifying the creditors that you are late on your loan. We all know that having lates on your report are rectifiable in a matter of 12 months.

However, if the bank forecloses on the property, you now have a judgment on your report which basically tells creditors that you are not a good payer and they had to go to court for a judge to give them back what you were supposed to be purchasing.

This can take as long as seven years to come off your credit.

Not a good look.

Short sale your property and walk away with your head held high. You can recover from this with dignity.

Getting into real estate can be a very daunting experience when you don’t know anything about short sales.

This is because many times when you go to the MLS or you have your real estate agent check the MLS for properties, many of them say that the price is “subject to the lenders approval” or something along those lines.

What this means is, although the property is listed at a certain price, it is up to the bank to decide if they are going to sell it for such a price.

The good thing is that the price is way less (from 50 to 80 percent) of the original price. Therefore, you can purchase a home with lots of equity in it.

However, the bad thing about short sales is that the banks take their time to give you their approval.

This can sometimes kill the deal because if you are financing through the bank, and they give you an approval for the loan, that approval has an expiration date.

If you don’t close within two days that they give you an approval, they will start to look at your file again trying to see if something is wrong.

Now although your file may be tight, this can still open a can of worms that you don’t want open.

The best thing is to keep an open relationship with your mortgage broker and let them know the closing is contingent on the property’s bank’s approval.

Yippeee…

Have you heard the great news?

Now when you give a short sale offer to the bank on a primary resident they have to give you the amount that they are willing to accept at the time the offer is presented.

This is great news because normally you find yourself in negotiations with a bank on a short sale for two to twelve months.

Years even, depending on the bank.

This is great for the owner of the property,  because they will know exactly if they need to make plans to vacate the premises on a high note or a low one.

I mean it can be a matter of exiting with a sheriff’s sale notice on the door telling them to get out within two weeks or having at least 30 days to find new habitation after selling their home at a discounted price.

If you are in the business of making money on short sales then you know that this means bigger pockets in quicker time.

No more wasting countless months and sometimes losing buyers because it took too long to get the approval and the investor moved on to another deal that didn’t take as long.

That’s right…

I am on my way to giving another short sale offer to a bank with the ease of mind knowing I will get an immediate yay or nay.

Buying short sales is a very good deal for an investor because basically you are getting a home that was once valued at a high price, for much less.

The reason banks even think about doing a short sale is because they do not want to foreclose on the home and have it on their books.  Therefore, they would rather take a small loss than lose 100% of the money they invested into the home.

It also saves them time of actually having to take full possession of the home after the foreclosure and pay all the fees that goes with it.

It is also wise to buy a short sale because the odds of the property being vandalized is much less because the owner usually still lives in the property as opposed to foreclosures that are usually broken into and stripped of anything valuable.

There is also the issue of bidding. When buying a foreclosure from a listing, you have to bid on the price either at an auction or through a realtor. If there is more than one person interested in the property, you have hope that your bid was the highest.

When buying short sales, you are the only one dealing with the bank directly and giving them your offer.