Your Short Sale Questions Answered
I’ve received a lot of questions about short sales lately and because now is such a perfect time for them, I want to expand a little more on the topic. In the current market, it’s very important to know how to determine what the ideal short sale is. Pay attention because I’m about to reveal a few golden nuggets of information that Doug and I have learned over the months and years that we’ve been doing short sales.
First of all, one thing you should look for is a house that’s at least twenty years old. In most situations, if a house is at least 20 years old then it needs some sort of repairs and you can use these repairs to your advantage when you’re negotiating with the mortgage company. This shouldn’t be a problem considering the inventory available today.
BPO stands for Brokers Price Opinion – this is either a real estate agent or appraiser that the bank hires to give them an estimated ‘as is’ value of the property. Having contractors give you repair bids and showing those bids to the BPO is invaluable in getting a lower appraisal value. On new houses, it’s really hard to convince a BPO or a mortgage company to do a huge discount because they feel that the property is in such good condition. Typically this goes along with older houses, but ideally you will want at least $15,000 in repairs that are needed on the property. A lot of times $15,000 in repairs from an investor’s standpoint translates to as much as $45,000 on repairs to a BPO or a mortgage company, simply because those are the kinds of prices that they would have to pay if they were going to fix this property up to a marketable condition.
When you’re first deciding if you should pursue a short sale, you should also know comparable sales in the area. If there are low comparable sales, you can present those to the BPO and the mortgage company to help prove your case.
Another thing you want to look for is a seller that has owned the property or had this particular mortgage for at least a year. When mortgage companies give a loan they get an appraisal done on the property, and if the appraisal is less than a year old they will still consider that appraisal to be valid. They are much less likely to consider a short sale from you when they have a valid (and almost certainly high-valued) appraisal on file. After all, they did base their loan on that appraisal.
Well, those are a few different things you should look for when considering a short sale. Even overlooking one of these things could cost you – it’s very important to pay attention to all the items above in order to get your conversion rates up.
If any of this sounds confusing, you need to be sure to join me and Doug on the exclusive webinar we’re presenting next Thursday. We’ll discuss short sales in much more depth, and you’ll learn the several steps to take to guarantee that your short sales are approved!
This free webinar will take place on Thursday, November 20th, at 5 pm PT / 6 pm MT / 7 pm CT / 8 pm ET. But here’s the catch — you MUST register to attend. And even if you cannot make the live webinar, you have to register to get access to the replay.
Yes, sign me up for the FREE webinar! But it’s best that you hurry — I’ve only reserved 500 spots, and I expect all of them to be reserved.
To Fun, Fortune, and Freedom!