St. Augustine, Florida (PressExposure) December 26, 2007 -- It is very embarrassing when an investor is in the dark about their real estate business. Always knowing at all times the area of expertise will place the investor above the rest.
When the seller agrees to an investor to short sell their property what show up on the sellerâs credit report is that the loan is paid or settled. There will be a notation that says âsettled for less than originally owed.â The credit will still be affected even if a short sale is accepted, approved and closed because of the previous late payments. Finding buyers for short sales depends on the location. Investors may advertise with bandit signs, in the local paper the local real estate investors club meeting (REIA) and using the multiples listing service.
Flat fee companies can cut down on commissions. Call the investor and ask if they are interested in purchasing the property. Some homeowners donât have a full understanding of a short sale. A short sale is a workout plan that the banks have in place to help homeowners and themselves prevent foreclosures. The mortgage company agrees to accept less than the loan amount to them to avoid the foreclosure process. The buyer would finance the acquisition or the investors can use creative strategies. The seller canât profit monetarily from a pre-foreclosure short sale in most cases. FHA programs will give an incentive fee of $500-$1,000 to the mortgagor to participate in the pre-foreclosure sale program. Mortgage Companyâs will not approve a short sale if the homeowner is in bankruptcy because approving a short sale payoff is considered a collection activity. Documents needed in the short sale package will depend on the lender.
Each lender has different requirements. It is typical to require authorization to release information, hardship letter, financial statement, purchase and sales contract, settlement statement (HUD1), pay stubs, bank statements and tax returns. The banks may ask for more so be prepared. Additional documents are needed on FHA loans. All lenders require a BPO or full appraisal of the property before making their final decision to accept or reject the short sale offer. This is how the property is assessed so the bank can make a solid decision. When a short sale can start in the pre-foreclosure process depends on the state and the lender. To be on the safe side, allow a window of at least 30 days for the mortgage company to approve the short sale offer.
A Due on Sale clause (DOS) provision in a mortgage or deed of trust calling for the total payoff of the balance in the event of a sale or transfer of title to the secured real property. A contract provision which authorizes the lender, as its option, to declare immediately due and payable sums secured by the lenderâs security instrument upon a sale of all or any part of the real property securing the loan without the lenderâs prior written consent. Contact the local real estate attorney of that state for more details.
Sometimes the bank will allow a short sale when the owner has equity. If a property has what the lender would consider a substantial amount of equity the answer is no. The lender has a better chance of selling the property closer to the retail value after the property has gone into foreclosure. If the BPO appraisal can come in lower than the market value the answer is yes. The investorâs job will be to create the equity in the home by negotiating a successful short sale and affecting the banks value on the home.
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Mary Geronimo 303-B Anastasia Blvd. #148 St. Augustine, FL 32080 904-819-0676 Email Address: email@example.com [http://www.FreeShortSaleCourse.com] This Press Release has been submitted by PREasy.com