The Best Way to Buy a House in a Short Sale
A quick sale is a complex process, though the math is fairly clear to see. There's a $6.00 loan on a house that is worth $4.00. The vendor wants out. You can choose from the house to the buyer for $4.00. The purchase money goes to the lending company. The bank eats the $2.00 Which is a classic short sale.
It's really a Bankruptcy Without The Lawyer
Short sales are just like bankruptcies. In a corporate bankruptcy, one population group is going to get screwed. It's either the bondholders, the shareholders or bank. Usually its the shareholders. In a short sale, the owner is likely to be the one using the disadvantage, since they will require a hit on their credit and so on their taxes. As the buyer, you're the individual who makes all the problems go away, but you have to start within the right place and that is with the seller.
Commence with the Seller
When we buy houses, we will need to make it clear to the seller our participation includes a money limit as well as a time limit. You also want to add a bit sugar to the deal so you've got something other than a signature hanging around to bargain with. Give a 2% premium and put a difficult clock on the deal. If the sale does not close by X date, you're out. Which will likely sweep aside any static for the seller's end. Sell House Fast Charlotte NC
Both sides Against the Middle
After you have the seller on board you come with the deal from the bank side on the table. Get the seller's terms in writing and ask the bank for a term sheet. Convey a clock on it. The lender is highly motivated to get out of the house and into a revenue stream, in order that they are going to be cooperative in the event the deal is even near to making sense. Result in the same offer here: 2% premium as well as 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 walk away. No sense in giving your equity to the bank in the mortgage contract. Remember you take the risk and bailing two parties out at the same time. You should get most of the reward.