It is true short sales are less frequent in today's Marketplace, but they still do happen. The challenge that we see right now is the banks are coming back with really high prices. It can potentially be a problem for people without a lot of experience. So how do you get the best price on a short sale? We're going to take a look at some factors that can make a big difference.
Short sales are a great tool to help families that are underwater with their home as a method to avoid foreclosure. In a lot of cases, if you address the situation early enough, you have many options at your disposal. It can help a family avoid a bad situation with their credit and at the same time allow the investor to profit from the transaction. Short sales even today can be a useful way to profit and have everybody win that's involved.
One of the first strategies and investor can use that is very effective is submitting a contractor's report with the repair estimates. The reason why this is important is that the bank will send somebody out to determine the BPO or a broker priced opinion attempting to assess the value of the property in question. The problem with this opinion in today's market is the banks are coming back with valuations that are quite high. Despite getting BPO done, banks are not in the real estate industry specifically. They are in the lending industry and are seeking profits. The bank is attempting to get as much for the property as possible, and in many instances, it's just unrealistic.
The contractor's report should come from reputable Company with years of experience behind them. It should consist of detailed outlines of their inspection including full pictures to support their views. An ideal report will introduce a hundred Pages or more. The benefit of having this much detail backed with images and submitted in a concise, organized manner will make it difficult to dispute. Having this much detail is professional and can make a deal profitable again.
Another essential piece of the puzzle is to submit an appraisal of the property. There are many reasons for this approach, one being the fact that each property is different and unique. There is a lot of room for correcting a BPO that is off by getting detailed and focusing on things that are unique to the property. The condition of the property is also critical to consider and can reflect in an official real estate appraisal. It will help break down essential details often overlooked when the bank is considering its position. Again, the banks are in the industry of making money and may not have the eye that's needed to highlight certain aspects reflecting the value of the property more accurately.
Another element to consider is providing accurate comparable prices of homes that have sold at the price you're seeking in that area. It will help support your position allowing you to negotiate to compare Apples to Apples. Banks will put the price out there in hopes to obtain the highest amount hoping people will pay for it which can a tricky especially in pre-foreclosure. By providing an offer supported by substantial facts makes the negotiation process that much easier.
In conclusion, it's best practice to submit a contractors Report with repair estimates detailing what it will cost to repair. Presenting an appraisal of the property is also very useful for getting a lower price in the short sale process. Showing the bank actual comparable prices of properties in the area that have recently sold will reaffirm your position.