Short Sales

[Garris Covington IV]

Hello,

Big Pockets family members, Garris Covington here in Kenosha, WI. I am a newbie to the investing business. I have my first offer in just waiting to here back from the realtors. Lately I have been coming across a lot of short sales that seem to be good deals just looking at the photos and the numbers from the MLS, but I'm not sure if they are or not since I am not to familiar with short sales. Does anyone have any info/input on how to approach such deals and is good pratice to go after short sales for investment properties.

[Christine Kankowski]

SHort sales are just as good as any other deal, however, the difference is that the price listed on the MLS is not necessarily the price that will be accepted by the bank. Agents / sellers need to list the home for sale and get an offer before submitting to most banks for approval. At the time, the bank will then confirm that the seller has a legitimate hardship and the price is close to fair market value for the home. This process can take a few weeks or a few months depending on the bank.

The downside is that the answer could be no after waiting for several months.  The good side it that typically the homes sell for less than regular sales because many buyers are not willing to wait that long for an answer on the property. 

So even thought the home may be listed for $150K wich could be a stellar deal, the bank can come back after 1 month and say, sorry, we need $190, or no deal.