subject: How To Buy Short Sales And Profit From Them [print this page] Many smart investors prefer to buy short sales. And many distressed homeowners prefer to make short sales. So why does short sale the preferred choice of not only investors and distressed homeowners but also lenders?
Short sale is a popular option for many troubled homeowners who want to avoid foreclosure and save their credit rating. The method is popular among homebuyers and investors for the primary reason that the properties sold are very cheap. However, as a buyer, it pays to understand the process thoroughly to avoid any pitfalls and ensure the success of your investment.
A Look at Short Selling:
A short sale deal can only happen during the pre-foreclosure stage. This is when homeowners have already defaulted on their mortgage, with the prospect of foreclosure hanging like Damocles sword. A homeowner asks permission from the lender that he will sell his home. In the event that the lender agrees to a short sale deal, it also means that he agrees to accept whatever is the amount that the distressed home can fetch from the market as full payment for the debt of the homeowner.
Short sale is a way for distressed homeowners to avoid the trouble of going through the foreclosure process. It also gives them the option to save their credit score from complete ruination.
How You Can Profit from Short Sales:
There is no doubt that you can profit much if you buy short sales. This is for the simple reason that properties sold during short sales are really cheap. Usually, homeowners would sell their properties at more than half of the current market value in order to find a buyer immediately. Keep in mind that the homeowner is time pressured and so will accept any reasonable offer to buy.
For a minimal amount, you can buy short sales and re-sell them in the future for a higher price. Just make sure to practice due diligence in order to protect your investment.
