What a NewbieReal Estate Short Sale Tips
Here are some tips and significant details you need to know about real estate short sales and property flip transactions. When you have to sell something, you never get to sell it for as much as it's really worth. If you don't have to sell it or if you are not in a hurry to sell it, you can usually sell it for a lot more money. If you learn how to play between those two worlds, buying it at the distressed price and selling it at the arm's length value, the spread is where the investor can legitimately make their profit.
Now there are red flags and black flags for improper property flip transactions. The black flag is what kills the deal. The red flag means you need more information. You have to document something. You have to verify something. You have to address something and then that's when you can move on. When you are doing a back to back flip and a short sale, you are going to be paying attention to who is the owner of record. Well the owner of record is the person who is still in foreclosure because you the investor haven't quite bought it yet. You are in the process of being able to buy it and in the process of being able to sell it at the same time.
At least that's the way most short sale investors work, they want to buy it on Monday morning and they want to sell it before lunch on Monday. Or is this what everybody is trying to do? Buy and sell on the same day, make the spreads and go home. Another thing is that if the property seller, that means the investor who is selling the property, for purchase transactions, is not the owner of record means that they currently were not the owner of record. If the property seller for purchase transactions or the borrower for refinance transaction is not the owner of record, the seller must investigate the circumstances of the transaction to ensure that the transaction is legitimate.
When analyzing sales contracts and other documentation it is quite necessary to exercise due diligence. Here's what you can do regarding documenting the legitimacy of the transaction in your mortgage file. Get some pieces of paper including but not limited to the appraiser's analysis and conclusion in their report, a property sales history report. Look carefully for terms indicating that there's been an assignment or the sale of an interest or an option to acquire the property. Find it, document it, and make sure it all makes sense.
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