The Benefits of Short Sales for Real Esate Investors

Once uncommon, real estate short sales have become the norm.

The decreasing housing industry in the United States, combined with record numbers of property foreclosures, has triggered an outburst in the number of short sales or pre-foreclosure sales. These kinds of sales occur if the home owner as well as the mortgage lender consent to sell a property for cheaper than what exactly is owed to another buyer.

And they are really ripe opportunities for investors to purchase homes and properties at below-market values.

The Key Benefits of Short Sale Houses

Pre-foreclosure sales offer several benefits to buyers, sellers and investors: The new buyer buys the house for the “short” amount with built-in equity and at a much more affordable price. The last owner avoids property foreclosure, preserves their credit score, and is generally willing to buy a house again over time. The short sale investor has got the investment property at below market value pricing.

The Short Sales Market

Having an incredible number of foreclosed properties pulling down their balance sheets – and forcing some banks to close their doors – short sale houses actually are driving the troubled housing industry.

These sales usually are famous for one main reason: One in every 136 homes in the United States is found in foreclosure, based on latest statistics from RealtyTrac Inc.

Many of those homes are prospective candidates for short sales. And, as job losses mount, even more homes may be sold this way – and serve as a boon to real estate investors who want to buy homes with instant equity at low prices.

Banks In The Short Sale Business

Lots of homes are in pre-foreclosure or foreclosure that banking institutions have set up departments to deal with the overflow. The bank isn’t in the business of holding or sustaining foreclosed properties; it requires time and money to keep a home in default The bank loses money if the property is in foreclosure because no one will pay for the mortgage.

So, selling the property at a lower price is often the best option for the bank compared to not generating any income at all.

This is exactly where short sale investors come in. Nearly all banks have a method for short sales. With a bit of patience – it takes anywhere from three to nine months to get your deal accepted -- you can receive investment properties at the best prices.

The process could be time consuming thus it’s better to use an seasoned short sale agent or negotiator. It can take months for the bank to accept your short sale offer, but the benefits may very well be worth the wait.

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