Is buying a short sale home worth it?
Answer:If the lender agrees, yes. Buying a short sale home is a very lucrative investment. On short sale, a property may be bought for less than 60% of its original value.
When will the lender allow an investor to buy a short sale home?
- The hardship letter provided by the seller has to be very explanatory and convincing.
- The bid has to be high.
- The lender should only have several homes facing foreclosure.
- The lender will want to see the Settlement/Disbursement Estimate to make sure no funds were received by the seller.
How to succeed in buying a short sale home?
Contact the loss mitigation department of the lender and provide a seller signed Authorization to Release Information form. Mitigators will inform you of how your bid is doing and whether there are chances for a short sale home purchase to take place.
However, even if your bid is the highest, the lender may not agree to a short sale, especially not so during the first several months after the short sale bid was made. Rather, they will wait for a higher bid and this procrastination may take months and even more than a year.
Final piece of advice: Monitor your credit report and score regularly, to ensure there are no inaccuracies or unauthorized activity. Your credit report and score are the two major methods that creditors and lenders use to make a credit decision about you. Higher scores usually mean lower interest rates, which will save you money.
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