I am just picking people’s brains with this one. I would like to know what you think is a better market Probate or Short Sales to me it seems that Short sale investing is a dying breed and with the baby boomers probate is an up and coming market plus you don’t have to fight with the banks.Please let me know you thoughts
I personally like short sales. BTW, short sales are not dying. An estimated 7 million people will default on their mortgages in 2010. There is plenty of money to be made in short sales.
Welcome!
With Short sales, you’re dealing with banks so you never know when they’ll get done.
My most successful ones have been on junker 9fire damaged etc ) properties that they didn’t really want back.
With probates, you’re dealing with the court. They have to approve the sale and you have to deal with the executor/trix who needs to make sure that all the heirs are somewhat happy.
Both can take some time, but can be very profitable- especially with probates due to the equity position.
Having said that, I would still focus on quick cash flow through wholesaling. It’s nice to get cash each month while you wait for the bigger paydays.
I posted some comments on how to get a ton of deals from probate attys in this forum.
Hope it helps!
Dennis
UH Both!!
A deal is a deal is a deal is a deal! Have a open mind to everything! Why market to just one. when you can get deals from both.
Short sales are allot of work and allot of frustration. With the large financial institutions they have a department just for this called loss mitigation departments. You are just a number to them. You often get lost in the shuffle. It is often hard to get a timely answer to questions. There are tons of paperwork that needs to be done.
Now if you are dealing with a small local bank they can be a breeze. As I think back I have done 5-6 with local institutions. They were all real easy and I made money on all.
Probate is an all right area to work. I pursue probate cases on a regular basis. I go to the circuit clerk’s office in Bureau, Putnam, La Salle, and Grundy county and go through the probate files. I take down the name and address of the Executor of the estate it has real estate in it. I then send them a post card and follow up in the month with a letter. Have not closed a deal yet but just started this the first of the year.
Hi,
In a probate sale, the property is marketed just like any other property. The estate attorney hires a real estate agent to post the listing and sell the home.It can be attractive to buyers because they’re often priced below their market value, Generally, the list price is based on the listing agent’s suggestions as well as an independent appraisal ordered issued by the court.
Selling a home at a lower price than the amount homeowner owes on the mortgage is called a short sale.A short sale can be a good deal for a buyer and it can help the seller avoid having a full foreclosure on her credit record.
Thanks!!
I swear, no matter what industry I work in… “{INSERT} is dying” is a headline I read. It’s either a type of adverting, a sales system, a type of buyer, etc. I’ve yet to see something actually “die”.
In my area, Salt Lake City Utah, short sale potential is way down. The number of foreclosures are way down, BUT most of the foreclosures have equity now. So very few short sales but much easier to buy foreclosures ought right. If one can only market to Foreclosures OR probate, I would market to probate.
I personally like Probate more. I have an attorney that helps me with this, so I guess it’s because of my connections I have success with it. I also target my website, to target Probate and inherited homes. It really works! I get tons of leads because people search out where they can sell a trashed, inherited home.
Hi Caroline,
Great explanation of short sales and probate.
Much thanks for sharing the information.
There is no doubt that probate is superior to short sales in terms of marketing for motivated sellers.
First, probate properties have landed in the hands of: (1) people that predominantly did not choose the property, and (2) are in control to sell the property. Given the deceased is often on the elderly side, houses have that delayed maintenance (and often times decisionmaker far away) that is the hall mark of a real estate investment deal.
Second, you can’t even market to short sales. What is the point of mailing low equity homeowners? They can’t sell even if they wanted to. Sure, you could ask them to submit an offer to the bank, though in most cases you’d need a realtor to effectuate that transaction. To do this ethically, the realtor is supposed to solicit highest and best offers. Once that happens, your offer could very well be shot. Moreover, the entire short sale process can take 6, 9, 12 months or even longer. Banks move notoriously slow.
Probates all day long!!! Just closed a $50,000 deal from probate!
I had a ton of success with short sales from the years of 2007-2013. Much less over the last few years as there are not as many people upside down as there used to be. I bought and resold a short sale last year. I spent nearly 2 years negotiating that short sale but it turned into a huge profit deal. I used to mail to people behind on payments but stopped about 3 years ago. Probates are so much better. Don’t have to spend all that time negotiating short sales and dealing with banks!
I personally think probate is better than short sale as probate is a legal process through which the assets of a deceased person are distributed as laid out in the estate plan. The main purpose and importance of probate is to prevent fraud. So probate is better.
Have any of you worked with homeowners who had the option to do a short payoff (not a short sale) with their home? We had a seller approach us once who wanted us to put together a deal where he would short pay his home and then sell it to us, tremendously increasing his profit at close. We weren’t even close to the price he wanted, so we didn’t pursue that short payoff option. Just curious to see if anyone found themself in a similar situation
Relationships open doors in business. Yes banks are slow with short sales but…if one were to already have a relationship with a bank lets say through a small property preservation company who knows what could happen. Don’t ask me how I know.