Can someone explain to me how a short sale works? I am new in the game and I am trying to learn all aspects of the profession. Right now I am interested in seeking bank deals. I haven’t gotten the nerves to approach the owner during preforeclosure. I am still in my research mode. The market in Southern Maryland is really slow right now due to the loan guidelines changing. So there is not alot of homes in the 100 - 250k range. Foreclosures in this area are 300k + which doesn’t leave alot of wiggle room.
At a real high level, you are getting a bank to discount what is owed to them. They will sometimes do this instead of foreclosing. It all hinges on how well you build a case for them to show them selling to you at a discount is better than going to foreclosure. Lots of paperwork and lots of patience and persistence. It’s definitely not for everyone.
If you think it’s what you want to do, you need to find a good short-sale course or find someone to mentor you. It’s not something that can be explained on a forum or something you should just try.
Thanks Tom, I’ll continue to do my research and see if it’s something I’d like to do. I want to understand every aspect of the investment market.