How To Find Potential Buys
Apr 20, 2012 Real Estate Profit Tricks
Now that you have a better idea of what’s involved with the short sale process and how much money can actually be made, it’s time to start looking for some properties to consider buying.
There are several options on this front. One involves going it alone completely. The other two options will require that you work with real estate agents. All three can net you some very good purchases. You’ll likely save yourself some money by going it alone, but working with an agent can help you find buys that are potentially better and more marketable when you’re ready to put an exit plan into action.
Going It Alone
This can be a very time consuming process and it will require that you have a lot of patience. If a short sale hasn’t already been discussed between a homeowner and a lender, there are no guarantees that this is an option. The homeowner might have reasons to want to hang on to a property. The bank might not be short sale friendly. You will have to spend time pursuing to find out for certain. Still, it is possible that by initiating the process and suggesting the idea personally, you could land yourself a very good deal without competition involved.
To find properties that might be good candidates for short sales, you’ll want to look for homes that are listed as “lis pendens” in the court system. This indicates that the lender has begun the foreclosure process by notifying the homeowner of its intend to do so. While the foreclosure process has technically started at this point, you might be able to entice both the homeowner and lender into accepting an offer that’s reasonable. If you are successful, the homeowner will escape foreclosure and the bank will save itself time and money on taking the foreclosure process through to fruition.
To find properties in the lis pendens stage of foreclosure, you’ll want to scour your local court system for filings. In many jurisdictions you can do this using the Internet. In some cases, the search engine on the court system’s Web site will let you sort listings by action type, which means you can readily locate lis pendens filings.
If you do find a property you’re interested in, you’ll want to contact the lender that filed the paperwork in court. Speaking with the homeowner directly is also not a bad idea. Should both the lender and homeowner agree to consider a short sale, you’ll go through the process as described previously. As you wait for answers, you can do some preliminary research on the property to see if it’s a good candidate for purchase or not.
It is also possible to look for pre-approved short sales on your own. This will prevent you from having to hire an agent to help, but you might have to deal with the seller’s representative. To go this route, you’ll want to look in the usual places for real estate listings that are short sales, or listed as pre-foreclosure. The places to look include:
- Newspaper classifieds;
- Real estate Web sites;
- Local MLS systems, if you have access;
Real estate fliers and other advertising vehicles
How Real Estate Agents Can Help You
If you’d rather fast-track the process of finding short sale properties, working with a real estate agent is the best way to go. Your options here include:
- Hiring your own agent: You can enlist a real estate agent to help you find potential short sale buys. While some might not want to do this, many are willing especially when the market is down and sales are sluggish. Agents will know how to use the local MLS system to find properties that are negotiable in a short sale. The truth of the matter is that not all short sales are listed as such. Code phrases like “subject to bank approval,” “auction bound” and even “subject to bank approval” can all be tip offs. Agents will know what to look for, but you might not.
- Looking at listings and working with a seller’s agent: When a home has been set for a short sale the homeowner or the lender might hire an agent to list and represent the property. If you are interested in a specific property and know it’s a short sale, this can be the fastest way to go to find out more about the property and whether it’s worth pursuing or not.
Short sales are not in short supply at the moment. Whether you go it alone or enlist the help of a real estate professional, you are likely to come across very good buys. Keep in mind that a lender will do its best to get you to pay the highest amount and so will an agent that represents a lender. It’s your job – or your agent’s – to help you strike a deal that works to your advantage, as well.