Short Sale Properties

Buying Short Sale Properties In Nigeria: The Importance Of Preparation

Short sale properties in Nigeria real estate is when a financially distressed homeowner sells his or her property for less than the amount due on the mortgage. The buyer of the property is a third party (not the bank), and all proceeds from the sale go to the lender.

If you watch television or use the internet to catch up on the news in Nigeria, you should already know that short sale properties in Nigeria are a buyers market.  Many experts say the real estate market in Nigeria is in a poor state.  Yes, this is true.  That is unless you are a buyer with solid financial resources.  If you are, you should examine short sale properties in Nigeria.  They present many money-saving and moneymaking opportunities.


What Are The Short Sale Properties?

They are properties that will soon be in foreclosure.  The mortgage borrower cannot make their payments.  Foreclosure is right around the corner.  Homeowners want to avoid foreclosure at all costs.  You may be surprised to hear that lenders feel the same.  Foreclosure proceedings are stressful, lengthy, and costly.  In some instances, a short sale is opted for.  The home is sold before foreclosure.  It is sold for less than the outstanding mortgage amount due.  Typically, this means a good deal for the buyer.

Whether you want to use short sales properties to make money or save money, preparation is vital to your success.  So, what do you need to be prepared for as a first-time short sale buyer?


To Get The Run Around From Mortgage Lenders.

As previously stated, lenders consider short sales a foreclosure alternative.  It is their last attempt to avoid it.  Unfortunately, short sales aren’t much better.  Lenders can require a delinquent borrower to pay the difference through unsecured, standalone loans, but many simply take the loss.  No one wants to lose money, so you may have to wait and wait.  During this time, the lender is hoping they receive more short sale purchase offers or that the delinquent borrowers come into money.


The Possibility Of Losing Money.

As previously stated, short sales properties present good money-saving and moneymaking possibilities for buyers.  Typically.  Unfortunately, many properties are financed with two or even three mortgages.  There are also underwater homes, where the borrower owes more than the home is worth.  Short sales properties mean a loss for lenders, but in these situations, the loss is greater.  Always have a property professionally inspected and appraised before the final closing.  To make or save money, only pay less than fair market value.


Constant Contact With The Mortgage Lender Or Selling Real Estate Agent.

As mentioned above, many lenders give short sale property buyers the run-around.  In the event that happens, don’t sit back and wait.  Instead, make contact with the representing real estate agent, lender, or both.  If you find yourself waiting after two months, be firm in your stance.  Demand an answer to your purchase offer in two weeks or state you will withdraw your offer.


More Waiting.

If your purchase offer is accepted, you may have to wait a few days or even a month to gain access to the property.  One of the reasons why homeowners prefer short sales for their properties is because they stay in the property.  As previously stated, short sales properties can take time.  Some mortgage lenders give a response and start the sale process within a few days, but others wait months on end.  Since there are no guarantees, current home occupants rarely know ahead of time when they need to be out.  The mortgage lender processing the sale may give them a week or more.


Right about now, you may think that short sales properties are more trouble than they are worth.  They are not, especially when compared to foreclosures.  You deal directly with a professional real estate agent or lender, as opposed to bidding in a fast-paced auction.  You get a property where the current occupants are prepared to leave; they don’t have to be forced from the home.  Yes, buying short sales property may be a long and bumpy road, but it is worth the ride for most.

Contact A Real Estate Professional.

If you have the interest to invest in Short Sale Properties in Nigeria, you can visit here or start working with one of our real estate professional today by filling the form below.

Buying Short Sale Properties In Nigeria: What To Expect As A Buyer

Even if you are classified as an inexperienced buyer, now is the best time to turn a profit. Whether you opt for owning and renting or real estate flipping, it is a buyer’s market.

Most Looking To Profit From The Real Estate Market Opt For Foreclosures.

These properties are typically auctioned.

In some cases, the lender regains ownership of the property.

This is known as a lender-owned or real estate owned sale. Either way, you will find dirt-cheap prices. However, it is important to familiarize yourself with short sale property. Although they cost more than foreclosed properties, buyers do get a better value for the money.

Short Sale Properties Are Sold For Less Than The Outstanding Mortgage Due.

How much less depends on a number of factors.

One being property value. If a mortgage lender believes they can get more for a property by letting it enter into foreclosure or by selling it as REO home, they may out for that route and deny all short sale offers. The next being the lender’s ability to take a loss. A NGN100,000,000 loss on a home is a lot to sallow. If an agreement is made where the delinquent borrowers repay the difference through a standalone unsecured loan, more flexibility is likely.

So, As A First-Time Short Sale Property Buyer, What Should You Expect?

Good value for your money.

As previously stated, properties are sold for less than the outstanding mortgage due. In most cases, this does result in a good deal. Although foreclosed properties are usually cheaper, think long-term. If a borrower owes NGN100,000,000 on their mortgage, you may pay NGN85,000,000. Although a relatively high amount, it works out well if the property is valued at NGN175,000,000 or more.

The run-around. Unfortunately, mortgage lenders try to avoid short sales property. Most only use them as alternatives to foreclosures. For that reason, a lender may wait until the foreclosure is right around the corner before accepting a short sale purchase offer. Buyers experience the biggest delay with properties with two mortgages. Both lenders must approve the sale. One lender will get all of their money and the other will be shorted. No one wants to lose money; therefore, lenders will exhaust all other options before turning to a short sale. This may mean a delay.

Various Calls To Mortgage Lenders And Real Estate Agents.

Either the lender or a real estate agent sells short sales.

Either way, be prepared to apply pressure. As previously stated, some lenders give short sale property buyers the run-around. They are trying to buy themselves more time. During that time, they will wait to see if the borrower’s financial situation improves if they receive a higher short sale property offer, and they will compare short sale with foreclosure. Even if you can, don’t wait forever. Contact the lender and your real estate agent to apply pressure. If you go two months without a response, demand one within two weeks.

The Difficulty Of Getting A Proper Inspection.

All homebuyers want to inspect homes before the sale goes through.

Most lenders give you the chance immediately before the final signing. Unfortunately, the home occupants may have vacated the property by this point. This may mean no functioning utilities. Your hired inspector will be unable to test the electricity. Try to schedule a showing or inspection ahead of time. Get your real estate agent, ask the mortgage lender, or approach the current home occupants to let you inside sooner.

The possibility of repairs and upgrades. If you are able to purchase a short sale property, be prepared to spend more. Borrowers often suggest short sales. They do this because they are concerned about their financial future. They know the impact a foreclosure and bankruptcy can have. These individuals truly care about their homes; they just can’t afford them any longer. Typically, you will get a clean and well-kept home. What you may find problems with are needed upgrades or repairs. If a homeowner couldn’t afford their mortgage payments, they may have been unable to fix that leaky faucet, loose tiles in the bathroom floor, and so forth.

So, there you have it! You now know what to expect when buying a short sale property. Despite the various bumps you may experience along the road, it is easy to profit from the buying and reselling or renting of short sales property in Nigeria.

Contact A Real Estate Professional.

If you have the interest to invest in Short Sale Properties in Nigeria, you can start working with one of our real estate professional today by filling the form below.

Contact A Real Estate Professional.

If you have the interest to invest in Short Sale Properties in Nigeria, you can visit here or start working with one of our real estate professional today by filling the form below.

Buying Short Sale Properties In Nigeria: Dos And Don’ts

Now, it is a buyers market. Many borrowers are unable to afford their mortgages. This is often due to job loss, poor financial choices, and adjustable-rate mortgages. Foreclosures are happening at a record rate in Nigeria. Unfortunately, foreclosure proceedings are not a walk in the park. They are lengthy and costly for mortgage lenders and embarrassing for mortgage borrowers. For that reason, many are now opting for short sales properties.

If you are new to buying real estate and want to profit from buying and reselling or buy a cheap first home, please continue reading on a for a helpful list of dos and don’ts for foreclosure and short sales properties in Nigeria.

DO Know What Short Sales Properties Are.

You cannot profit from short sales properties in Nigeria if you are unfamiliar with them. Short sales properties generally involve selling a property for less than the outstanding mortgage amount. For example, if a borrower owes NGN100,000,000 on the home, the lender may accept around NGN70,000,000 or less. In dire circumstances, the home’s original value may not even be considered. So, that NGN7,000,000 may buy you a NGN125,000,000 home.

DON’T Just Focus On Foreclosures.

First-time homebuyers and new investors make the mistake of focusing only on foreclosures. Yes, they are your best chance of getting a great deal. With that said, remember they are not a walk in the park. Foreclosure proceedings take months or even years. At foreclosure auctions, there is a lot of competition, which comes from experts in investing and real estate. Then, you may be left with home occupants who refuse to leave. Short sales properties eliminate this problem. Mortgage lenders and borrowers reach the decision together.

DO Actively Search For Short Sale Properties.

Unlike foreclosures, information on short sales will not just arrive at your doorstep. Short sale properties are sold either through lenders or professional real estate agents. It is easier to spot a lender sold foreclosure. Lenders are not real estate agents. They are either selling a short sale property or a real estate owned (REO) property, either way, you can get a good deal. Real estate agents may not outright state they are selling a short sale property, but they tend to drop hints.

DON’T Fall Victim To Short Sales Property For Underwater Homes.

As previously stated, short sales property involves selling a home for less than the outstanding mortgage due. This should result in a good deal, but not always. Due to depreciating home values, many borrowers are finding themselves underwater. This means they owe more than the home is worth. A typical short sale property aims for less than the mortgage. With underwater homes, the selling price may be more than the home’s fair market value.

DO The Research First.

As previously mentioned, short sales property for underwater homes isn’t a steal. In fact, you can lose money. To prevent this from happening, do the research first. In fact, real estate buyers should always research. The home’s last appraised value is public record. Find it. Remember, you want a good deal so make sure you are paying less. It is of best interest to contact a real estate professional to guide you.

DON’T Wait Forever.

Some lenders drag their feet with short sales. This is often when a third-party investor, such as Wall Street, is involved. Some buyers are on record as saying it takes months on end to receive a response to a purchase offer. Don’t wait. This increases your competition, which may drive up the price.

DO Push For An Answer.

So, you made a purchase offer on a short sale property, but are still waiting for a lender response two months later. What should you do? Of course, you can give up, but push. Contact the lender directly or the real estate agent in charge of the sale. State you want the property, but are quickly losing interest. Plainly state you want an answer in two weeks or else you will withdraw your purchase offer and look elsewhere. This should do the trick. In fact, a response may come immediately.

In short, short sales property are a good opportunity for first-time homeowners on a budget or first-time investor looking to turn a profit. Regardless of which type of buyer you are, do not discount short sale properties, but do the research first.

Contact A Real Estate Professional.

If you have the interest to invest in Short Sale Properties in Nigeria, you can visit here or start working with one of our real estate professional today by filling the form below.

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