Question:

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.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
Was this Mortgage QnA helpful?
Not at all
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5
Definitely
Add to this Answer

Mortgage QnA is not a common forum. We have special rules:

  • Post no questions here. To ask a question, click the Ask a Question link
  • We will not publish answers that include any form of advertising
  • Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
If you have trouble reading the code, click on the code itself to generate a new random code. Verification Code Above:
Bookmark and share this QnA: