We all know that Short sales (especially on Luxury Houses) can provide a very lucrative income for savvy real estate investors. But, it’s doesn’t come without its minor or major quirks. Luxury Short sales can be very complex and lengthy, it’s important to know what you’re getting into before you dive in head first. Of course we have tons of expert advice and guidance we provide here at SREC (recently voted as one of the TOP 50 Companies to Work for in the United States by “Outside” magazine (May 2010 issue) and the “Best Companies Group”, but in a nutshell, here’s a few things to know about short sales:
1. Negotiations and Updates could take months – While banks are revamping their procedures and capacity to handle short sales, it still is not making the process any faster. During the handling of your deal, you won’t necessarily know the details of the process.
2. Most Banks will deal, within reason – There are deals, but not always steals. Banks want to get these homes off their books, but not take a bath on them. Be smart and do your homework and be sure to provide all the required proof and paperwork.
3. All Short Sales are “as-is” – It’s very unlikely that you’ll get an allowance for repairs on the home. Know what you’re getting into by again, doing your homework. Always assume that some repairs will be necessary to get property in sellable condition.
4. Have your back-up plans ready, keep marketing the property so your exit plan can be executed when the short sale gets approved – But remember don’t put all your hope on one house. During the negotiations, keep looking for other opportunities.
5. It’s not only about price – Factor in everything about the purchase – cost, repairs, resale potential, your exit strategy. As a successful and savvy investor, you will and should have more than one ace up your sleeve, so if it doesn’t look right, move on.
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