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.

Recommended helpful present and future homeowners links:
Why: Refinance to a fixed rate loan while mortgage rates are still low.
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Common misspellings: mortage and morgage