Do You Want To Profit From The Buying Short Sale Market?
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 buying short sale property. Although they cost more than foreclosed properties, buyers do get a better value for the money.
Buying Short Sale Properties 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 buying 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 Buying Short Sale Property, 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 to buyers.
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 When Buying Short Sale Home.
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.