Real Estate Investing Strategies: How You Can Build Wealth Through Short Sale House Deals

Wednesday, August 5, 2009

How You Can Build Wealth Through Short Sale House Deals

When a home owner runs into financial difficulty, there is the possibility of reaching an agreement with their bank to put the property on the market as a short sale house. The sale of a property by an owner in financial hardship before the property reaches the point of complete foreclosure is known as a short sale. In the case of short sales, home owners will see less adverse impact on their credit rating than they would if the bank proceeded with a full foreclose on the short sale house.

As a general rule, when there is a house on the market, the current home owner needs to repay the bank more than the present market value of the property. As a consequence of this situation, the bank will usually sell the home at a significant discount following an agreement on the house. It is necessary for the bank to sell the home at a discounted price, to recoup the outstanding mortgage and the short sales home costs. This means there is a deficiency between what the owner’s outstanding mortgage and the sale price. Ultimately, the short sale house option remains a better choice than foreclosure for distressed owners.

As the current economic crisis has escalated, the number of home owners choosing short sale over foreclosure has increased. If you are involved in real estate investment, the increase in short sale homes is an opportunity for investors. Structuring deals that bring together sellers and buyers of short sale homes can be very profitable. Someone with experience of these short sales home deals can transform this distressing situation by securing a buyer for the homeowner and creating a profitable deal on the property.

During 2008 there were 2.33 million property foreclosures. This saw some 860,000 families lose their homes. If the possibility of foreclosure is looming, then the short sale house agreement can help these desperate owners. This is a solution that people are turning to in droves – creating opportunity for those real estate investors that know how to structure profitable deals that benefit all parties. There is no doubt that those facing foreclosure have some tough financial decisions to make. The home agreement provides sellers with the best possible outcome in light of the difficult situation they are faced with before a property goes into foreclosure.

Short sale houses are usually sold at a discounted rate. While banks are usually able to forgive the remaining mortgage debt, this is not always the case. When you understand how to put together a short sale correctly, you can create and fund short sales home deals with transactional funding. In this way you could be providing financially struggling families with a better solution and alternatives when the threat of foreclosure is looming. Your deal could dramatically improve the future financial outlook of a distressed home owner and their family.

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