Share this content on Facebook!
19 Sep 2015
A brief sale is a complex process, however the math is fairly clear to see. There's a $6.00 loan with a house that is worth $4.00. Owner wants out. They sell the house to the buyer for $4.00. Buying money goes to the bank. The bank eats the $2.00 This is a classic short sale. We Buy Houses Charlotte NC

It is a Bankruptcy Without The Lawyer

Short sales are similar to bankruptcies. In a corporate bankruptcy, one crowd is going to get screwed. It's either the bondholders, the shareholders or the bank. Usually it will be the shareholders. In a short sale, the vendor is likely to be the one with all the disadvantage, since they will take a hit on their credit as well as on their taxes. Since the buyer, you're the individual who makes all the problems disappear completely, but you have to start in the right place which is with the seller.

Focus on the Seller

When we buy houses, we have to make it clear to the seller our participation has a money limit and a time limit. You also want to add somewhat sugar to the deal so you have something other than a signature hanging around to bargain with. Give a 2% premium and put a hardcore clock on the deal. In the event the sale does not close by X date, you're out. Which will likely sweep aside any static for the seller's end.

Both sides Against the Middle

Once you've the seller on board you come on the deal from the bank side on the table. Get the seller's terms in writing and ask the bank for a term sheet. Put a clock on it. The bank is highly motivated to emerge from the house and into a revenue stream, so they are going to be cooperative in the event the deal is even close to making sense. Increase the risk for same offer here: 2% premium along with the mortgage if the deal closes by X date or you're out. We Buy Houses Charlotte

Also be sure the bank can give you premium terms on the mortgage or leave. No sense in giving your equity to the bank in the mortgage contract. Remember you take the risk and bailing two parties out simultaneously. You should get most of the reward.


Comments

There isn't any comment in this page yet!

Do you want to be the first commenter?


New Comment

Full Name:
E-Mail Address:
Your website (if exists):
Your Comment:
Security code: