May 14, 2008

How To Buy Short-Sale Properties

By Marcie Geffner - HomeVestors.com

Weak housing markets create new golden opportunities for property investors. One classic opportunity is a "short sale," so-called because the owner has agreed to sell the property for less than he or she owes on the first and possibly second mortgages. The seller usually intends to leave the lender "short" on the sale, and that's why the lender's approval is required for such sales to close.

Here are some tips for investors who want to purchase short-sale properties:

Get to know the sellers. A successful short sale typically is predicated on the seller's financial hardship, which is the impetus for the lender's approval of the deal. Savvy buyers look for sellers who are behind on one or more of their mortgage payments and who aren't in a strong enough financial position to catch up the payments they've missed.

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