on 18. Jul, 2010
To the new real estate investor it can be a little confusing when trying to figure out all the reasons a bank would have to approve a short sale. As you assemble short sale packages on behalf of your distressed homeowner, keep the following reasons in mind:
- The mortgage is behind in payments or already in foreclosure.
- The property is distress and in very poor condition.
- The homeowner is experiencing hardships and can no longer afford to make payments.
- There are newer homes in the area that are being chosen over older used homes.
- The neighborhood is in a downward trend and losing value every month.
- The bank’s shareholders keep pressure on management to not have too many defaulting loans on the books.
- Statistically speaking, some banks are required to prove a loss each month.
- Some banks are required to have cash on hand equal to or up to six times the retail value of each REO (Real Estate Owned)
- REO properties are liabilities, not assets. Banks are in the business of loaning money, not managing property.
So remember the next time you’re assembling that killer short sale package, talk to the bank’s sore spots. Remind them of all the reasons they should sell to you now!
Tags: banks short sale, short sale investor, short sale package