RealEstate Investing:Tips On The Real Deals Happening Before Sellers Turn To Short Sales & Foreclosures

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In light of the current economy, many homeowners are forced into making tough decisions when it comes to their homes. They hold on as long as they can and then get stuck in an ugly jumble between the bank and what the current market dictates. A short sale position means the homeowner is at the mercy of others, waiting and waiting for the approval or denial of the sale. In the meantime, precious time ticks and ticks away. The market can get worse and buyers can retract their offers as they tire of waiting to hear back from the bank. Without any financial relief from elsewhere, many homeowners try short sales and end up in a state of foreclosure. And with foreclosures, no one wins. The homeowner is forced to move and the bank loses money. But it doesn’t have to be this way. There are deals happening in the real estate market that leave the banks out of the picture and close fast. Intrigued?

The first thing a homeowner in financial trouble should do is find a local experienced REALTOR(R) she can trust. She needs to be completely open and honest about her current situation with the real estate professional in order to get the immediate help she needs. The point is to try and make a deal happen before it gets to short sale or foreclosure status. And armed with all the information regarding the current financial state of the homeowner, and the status of the home loan (whether it is in default or not, a history of late payments, etc.), the real estate agent can start devising a plan to help the homeowner out, ideally without ever involving the bank.

The REALTOR(R) should have plentiful business connections, with investors, with other real estate professionals and more. These business connections make it easier for the real estate agent to devise solutions and network with others who may have their own possible solutions. One option the real estate agent may look into is finding an investor who can purchase the property and have the homeowner rent the home back. The homeowner won’t have to move and the investor has a steady tenant who will likely take good care of the property in hopes of one day establishing ownership again.

But even if the homeowner’s real estate agent can’t line up an investment deal, there are other deal possibilities. After evaluating the comparable homes on the market, the agent may just find the opportunity to sell the home at negotiate a deal that pays off the mortgage and closing costs, without being a huge loss to the owner. The home can be put on the market with incentives such as a larger commission to a buyer’s agent, paid buyer closing costs or something else desirable to prospective buyer. Making the sales listing as attractive as possible and positioning the home in a way different than any local competition may bring in a buyer and a quick sale.

Yet another option? The property may be in a desirable rental area. The homeowner can downsize to a less expensive home and rent out the property. The best case scenario would involve the renters paying rent that equaled the mortgage payment or more. But even if that was not a possibility, by downsizing the homeowner may be able to cover the difference between the rent and the mortgage payment and hold on to ownership of the property.

There are numerous benefits to homeowners who think outside the proverbial box and work with a creative real estate professional. The homeowner is taking a pro-active stance and is no longer a victim of circumstances. By taking charge, the homeowner is setting the stage for a better outcome overall. And the homeowner has the say in all of these options; she doesn’t have to wait for approval from an impersonal bank.

Also, such deals can close quickly, in anywhere from 10 to 30 days. With a short sale or foreclosure, nothing happens fast. Buyers make offers that languish for weeks and even months, as the bank takes its time to decide whether the offer is even adequate. Banks typically approve offers that ask for no contingencies, which may turn off some buyers. So this cuts down on the prospective pool of buyers for those short sales and foreclosures. With the homeowner handling the deal with her own real estate agent, she can say yes or no after evaluating the offer in its entirety, or even counteroffer. No weeks or months of living in limbo.

Volker Weiss - Maui Realtor(R/S) specialist focusing on Condos in Wailea. Make your vacation last forever, check out Wailea Real Estate. For immediate help call VW directly at 888.572.6888

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