How to bid on a short sale property

Short sale properties can be a great source of income for investors, and a great deal for home buyers.

It’s important to keep in mind that a short sale is one where the bank has approved a loss on a current loan. They’re losing money, so they want to unload.

Generally the current owner is in a rough time, or wouldn’t be facing the loss of the property. Difficult times mean tremendous amounts of stress and emotional turmoil.

Managing relationships is always the key to any negotiation.

For the bank, a short sale is an unemotional transaction. An owner may be letting go of a property with great emotional significance.

You’ll have to take different approaches with every party to a short sale transaction to get the best result.

Data is on your side. Look up comps to get an accurate picture of the market, and seek out justifications for your offer prior to submitting a written bid.

In a short sale, you have to get agreement from the owner and the bank(s) involved on the purchase price and the terms.

Getting written permission from the owner to discuss terms with the bank can be really helpful, but check with a good lawyer to make sure you have the right documents before you ask the seller to sign anything that might violate MO law.

Your relationship skills are super important during this process. The bank will often require days, even weeks, to respond to offers and move forward. Often they request additional BPOs (Broker Price Opinions) or modify appraisals, and they sometimes like to involve different negotiators.

It can be intensely frustrating, so prepare yourself and don’t stress.

Get fully approved for any loan you plan to take long before you make an offer. Make sure your lender can close at the drop of a hat, because once the approval comes for the short sale transaction you need to be ready for escrow.

We secure properties via short sale, and we work with many investors and buyers who are looking for great deals on properties in the Springfield area.

Give us a call (417) 942-6000 or get in touch anytime to find out how we can help you!

About Bryan Powers

I have been an Entrepreneur since the turn of the century in the music, restaurant and real estate industries. In November of 2014, I sold a long time family business and went full time with Family Home Solutions, a real estate start up company that I started in 2013 and had grown to 14 units. In our first month full time, we closed on 18 more investment properties growing our total units to 36 and I merged with another company who took the Family Home Solutions name and on January 1st of 2015, we had a combined 120 units and grew 300% to 370 units by the end of 2015. Our focus now is building our "turn-Key" business through wholesale acquisitions and expanding into multi-family properties Our goal for 2016 and beyond is to become a 7 figure wholesaling company with a rapidly growing turn-key lease property specializing in "option to purchase" for tenants. Within this model, we will incorporate an "elite" division for buyer clients who want to purchase vacation rental property. We intend to grow our internal hold portfolio through the acquisition of 50+ unit multi-family property across the country.

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