Results tagged “short sales” from boozwatt.com

Short sales are becoming more and more popular as more and more investors learn this creative technique which can create huge profits. A short sale is when a lender accepts a discount on a mortgage to avoid a possible foreclosure auction or bankruptcy. Instead of buying from a seller, you are purchasing the property directly from the lender for a discount. For example: A homeowner, who is facing foreclosure, has an existing first mortgage of $300,000. You write an offer to the lender for $220,000, which is accepted as full payment for the loan. This is a short sale. Why are they willing to take such a discount? Several reasons. First of all, banks do not like excess inventory and bad loans on their books; therefore, if they see an opportunity where they can sell the property without a huge loss, they will do it. Secondly, lenders know they could lose a lot more money if the property goes to auction. There are so many fees involved if the property goes to auction, that they would be better off taking the discount beforehand and be finished with the headache of it all.

Our Bradenton, Florida real estate market has seen a rise in foreclosures and short sales. A short sale occurs when a lender is willing to accept less than the loan balance in order to avoide taking the home back in foreclosure. Many investors work the pre-foreclosure market and have an interest in buying property by means of a short sale. A few days ago I sat in on a conference call with a bank Loss Mitigator who answered questions about SHORT SALES. He has worked 11 years in the Loss Mitigation Department for a major lender. The call was an opportunity for a group of investors to ask questions. Here's the questions and answers: