Friday, October 30, 2009

Building A Short Sale Package

By Karen Larry

If you are starting to invest in real estate, short sales may be a good place to start. The development of the short sale package is by and large simple. After you have profitably negotiated the acquisition price with the seller , you may choose to contact the lender to get a good feel for what their short sale expectations are and how they would like to see the package. Since the ultimate goal is to get the bank to accept your offer, you should be in contact with the lender well before you begin assembling your short sale package.

To get started developing your short sale package, determine which lender owns the note. For the reason that of the recent market shift, finding the actual note holder may be challenging. Regardless, it is imperative that you find out who owns the note in order for the sale to proceed.

Get in contact with the bank who controls the mortgage and determine who would be responsible for allowing the deal to go through. This is typically a loss mitigation officer. Find out what the bank needs and expects in a short sale package as well as any specific details that will help the short sale purchase offer to be accepted.

Once you have found out what the bank needs, start building a short sale package that will meet those needs. Because this is a short sale, you need to provide as much proof as possible that the value of the home is well below that of the current mortgage. To help build your substantiation, bring in appraisers and contractors to give an estimate to the cost of rehabbing the property. Also bring in an appraiser to give you a true market value estimation of the property. This, in addition to proof that the property owner can no longer pay the mortgage must go into the package.

The next step is simply to submit your short sale package to the lender and wait. It will now be up to the lender to accept the offer, or reject it based upon specific reasons. If you have created a thorough short sale proposal and your offer is sound, the bank should accept your offer. If they don't, simply change your offer and submit it again.

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