Have you heard that short sales are the alternative to foreclosure? They are and they are increasing in popularity. More borrowers and lenders are agreeing to them. For borrowers, short sales lessen the credit blow. For mortgage lenders, short sales allow the avoidance of costly and lengthy foreclosure proceedings. So, if you are looking for a great deal on a home or another property, don’t discount short sales.

As nice as it is to hear that short sale properties often result in good deals, you may be curious as to what they are. Short sales are when the mortgage lender accept the fact their borrowers cannot pay. The property will soon enter into foreclosure. Unfortunately, foreclosure proceedings are long and costly. Plus, otherwise cooperative borrowers put up a fight when it comes time to vacate the property. In fact, some must be removed by force. This is more than many lenders want to handle. Instead, they opt for a short sale. This is when the home is sold for less than the outstanding mortgage due.

On average, short sale properties are a good buy. For example, if a home is valued at $125,000, the borrower owes $70,000 on the mortgage, and you are able to pay only $60,000 you make out well. Essentially, you get a steal. Yes, you do have to put up a large amount of money upfront, but think long-term. Whether you want to flip the property right away or live in it a few years before reselling, you automatically make a profit. After all, you paid $65,000 less than the home was worth! Even if you cover the cost of the mortgage, money is still made.

In most cases, short sale properties are a good buy. You get a good value for the money. However, there are cases in which buyers lose money. So, how do you prevent that from happening?

Know if a property is a short sale property. Lenders either opt to sell the homes themselves or use a third-party realtor. In either instance, they want their money. They may try to sell the home for more than the outstanding amount due. In some states, it is legal to not disclose the true status of a property. Essentially, it may be a short sale property, but you may not know.

So, how do you know if a for sale property is actually a short sale? properties that are sold directly through the lender are almost always short sale properties. It is that or else the lender repossessed the home at a foreclosure auction. Either way, you can and should get a good deal. As for real estate agents, they may not outright state the status of the property, but most drop hits. Review the listing for phrases such as “lender must approve,” or “in pre foreclosure.”

Know the property’s appraised value. This should be public records. If the appraised value is years old, hire your own appraiser or inspector. A quick examination will let you know if you are getting a good value for your money. A true short sale property should be less than the home’s fair market value. In dire situations, where the lender wants to avoid foreclosure at all costs, they don’t even consider the fair market value. They just want to recoup as much of their money as possible.

Know if a home is underwater. A problem facing many homeowners today is that they owe more than their home is worth. This is common with second mortgages or homes that were purchased during the real estate boom. If a home is underwater, proceed with caution. Remember, not all lenders take a home’s value into consideration. They just want their money. This typically works out to your advantage, but not with underwater homes. For example, a home may be valued at $250,000, but the borrower owes $300,000. Even if you pay the $250,000 you don’t get a good value for your money. Yes, you are purchasing a home at fair market value, but your goal is to get a good deal. Unless buying a first home that “you must have,” walk away.

In conclusion, most buyers get good deals with short sale properties, but there are no guarantees. For that reason, do the research first. Don’t spend more than required, especially if your goal is to profit from the buying and reselling of short sales.

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Uncovering the Real Estate For Sale

Real estate investments are often termed as low risk investments that can potentially yield good returns. A lot of people think that real estate is an easy business where you don’t really need to do anything. However, the truth is that real estate business does need you to put in some effort (if you really want to make profits out of it). The most important thing is to be able to uncover the real estate for sale that will yield profits. So how do you go looking for real estate for sale?

Generally, a lot of people start looking for ‘real estate for sale’ through the internet. And why not, internet is after all the hub of all information. So, you could look for real estate for sale using the search engines on the internet. You could also specify your requirements in search criteria on the real estate sites in order to get very specific results on real estate for sale. You can even view images and video of some of the properties thus reducing the need for personal visits for viewing. So, this is surely a good option for finding real estate for sale.

However, not everyone is tech-savvy and there are a lot of people who still take the approach of putting up an ad in the local newspapers. So look for real estate for sale in the local newspapers. In fact, there are some newspapers that are dedicated to just that i.e. real estate for sale. You could even go ahead and put up a ‘wanted’ ad in these newspapers. Sometimes, looking up for real estate for sale in old newspapers (like 1-2 months old) can help you get a good deal (in case the property owner has not been able to sale the property and has become a bit more ‘motivated’ to sell it).

MLS i.e. multiple listing service is often termed as one the best ways to look for real estate for sale. These are published by the real estate boards. If you can lay your hands on a MLS book as soon as it is out, you can really expect to get good deals. The key is to act fast.

Open houses are another good way of getting the best out of time. You can get to see dozens of ‘real estate for sale’ properties in a very short period of time. And you never know when you might come across a property that is real gold.

Investor groups are yet another rich source of real estate for sale information.

Of course, how can we forget the real estate brokers? Real estate brokers are one the most popular (and sometimes most effective) information resource for real estate for sale. Not only do they provide information about ‘real estate for sale’ but also assist in getting the deal finalized and closed.

Besides that, you can also get very good deals through public auctions, bank foreclosures, FHA and VA foreclosures and distress sales.

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Real estate investment is about finding good deals

Real estate investments are often treated as one the best ways of investing money. However, what you are looking for is not just any real estate investment, but real estate investment that can give you good returns. By real estate investment we mean investing money into property i.e. buying property at a low price and selling it at a higher price so as to make a profit out of it. So the most important part of good real estate investment is to get hold of such properties which can give you good returns.

Now, how can you get these potential profit-making deals?

Your first avenue for finding good deals is the local newspaper (the property newspaper). Just search for properties that are listed directly by the owners who want to avoid paying commission to the real estate brokers. Since the owner is saving on the commission that they would otherwise have to pay to the broker, they would probably be able to offer a lower price to you and be more open to negotiations. You could also place your own ‘wanted’ ad in the local newspapers. On the same lines, you could use internet to search for the real estate investment avenues. In fact, you would be astonished by the number of real estate investment opportunities you are able to locate on the internet. Not only that, searching for real estate investment opportunities (i.e. property for sale) is much easier on internet than anywhere else.

Another good way to hunt for real estate investment opportunities is by using the services of real estate brokers. Some people use real estate agents as their first (and maybe the only) touch point for getting real estate investment opportunities. The real estate agents act as information hub for people looking to buy property. In fact, a lot of sellers find it much more convenient to sell their properties by listing it with real estate agents.

Multiple listings service is another good way to find real estate investment opportunities. Since the multiple listing book is provided only to the real estate agents and not to the general public (unless you are very lucky), all the cream (good real estate investment opportunities) would have already been taken before you get to see the book. The key here is to look for expired listings that didn’t get converted to a deal.
Another good way to get a property, that is a good real estate investment, is to look for foreclosures by banks/ VA/ FHA or to visit public auctions. You can generally get a good deal here. Divorce settlements are another good real estate investment opportunity.

The Best way by far I know to find teh Best Deals is by using the infromation available about properties in distress that have enough equity built in so that you can really profit from them. Click here to find out more information about the tool that gives you this information without having to leave your home.

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