Tips for investing in short sales
Work with a short sale specialist
If your goal is to focus on short sale properties, unless you have your own real estate license, you'll want to work with a real estate agent. Put simply, the most reliable way to find a short sale listing is through the MLS, which only real estate professionals can access.
However, in this instance, you don't just want to work with any real estate broker. Instead, you'll want to focus on finding a short sale specialist. Short sales tend to be more complicated than your traditional real estate transaction, so it's a good idea to have someone in your corner familiar with the process.
Read the short sale package carefully
Each short sale will come with a packet of information, known as the "short sale package." This package is put together by the mortgage lender and outlines all the important fine print in the transaction. With that in mind, read this document extremely carefully. By signing it and submitting an offer on the short sale home, you're essentially agreeing to all the terms within.
Budget for added costs
When buying a short sale, it's important to budget for additional costs beyond the purchase price. While the terms of every short sale are different, it's not uncommon for the lender to require the potential buyer to agree to pay the seller's portion of the closing costs.
In addition, you may need the budget for repairs to the home. In this case, if a homeowner cannot keep up with their mortgage payment, it's unlikely they have the money for routine maintenance and upkeep. As a result, short sale homes are often sold in disrepair.
The bottom line
Buying short sale property can be a great investment strategy. However, it's also one where you absolutely need to do your due diligence. Like a foreclosure sale, buying one of these homes could mean paying extra fees and facing the prospect of title problems. To that end, you're make sure you do your research before submitting any offers. When in doubt, consult with a real estate agent who has experience working with short sales in your area.