It has been the usual response to the current real estate trend of high foreclosures and a tough lending market for investors to start hitting short-sale and REO opportunities. Many commentators have suggested that now is that time to go after this opportunity - which suggests that there will be a time when we all return to the traditional purchase and sale method of acquiring property. In this article, you'll learn why.
Short-Sales Are Here to Stay
In real estate investing, you need to know about short-sales.
It has been the usual response to the current real estate trend of high foreclosures and a tough lending market for investors to start hitting short-sale and REO opportunities. Many commentators have suggested that now is that time to go after this opportunity - which suggests that there will be a time when we all return to the traditional purchase and sale method of acquiring property.
However, many investors, particularly those who have been on the up-and-down real estate train for the past 20-30 years, are suggesting that short-sale purchases are here to stay. Why? Because the nature of a cycle is for things to improve out of a slump and then back down again in future cycles. In other words, this year, while definitely handing us some records in high foreclosure rates and credit debacles, isn't necessarily unique.
Why Short-Sales Are Good
The reason is that there will always be lenders willing to offer loans to borrowers willing to buy a property with 100% down. There will always be borrowers who will use loan programs where you state your income to legitimize a much larger home purchase then actually necessary. And slumps in the economy will happen. This means there will always be properties headed for the foreclosure block. And there will, unfortunately, always be personal issues in the lives of borrowers that may prevent them from making their mortgage payments.
Fortunately, there is a positive solution with a short-sale in that investors can take advantage of under market pricing and likewise help the seller by removing a very expensive and credit-damaging foreclosure process on the horizon. Mastering the art of short-sale purchases both financially as well as qualitatively in addressing sellers' concerns can make an investor reap major rewards and keep a steady stream of purchase transactions in the pipeline every year, whether the market is up or down. Now is the prime time to learn since short-sales are here to stay. |
