Here’s a different investment strategy for you savvy investors out there always on the hunt for the next profitable investment deal. Have you heard of short sale property? Let’s cover what they are, why they should be of interest to you, and where you can find short sale listings.
Real Estate Short Sale Listings: What Are They?
So what’s different about buying an investment property listed as a short sale home for sale? Put simply, a short sale is a real estate sale in which the profits made are less than the existing loan on the property. Less profits? Why would a seller ever sell their property for below market value? Well, short sale sellers are typically in this situation because, unfortunately, they are in financial distress and a short sale is the best alternative to foreclosure for this property owner. That’s why short sale listings are also known as preforeclosures.
Learn More: What Is a Short Sale in Real Estate Investing?
Short sale listings are considered pre-foreclosure leads because these are properties which are in the beginning phases of the foreclosure process. At this stage, the borrower has already defaulted on their mortgage payments but still has the opportunity to either keep the property, sell it, or conduct a short sale.
So short sale properties are real estate listings sold to a third party (short sale buyers) for an amount less than that owed by the property owner. However, lenders must agree to absorb the loss caused by a short sale; this is usually done to avoid the rather costly process of foreclosure.
When scanning short sale home listings, buyers should make sure that these prospective short sales have been approved by the lender. Sometimes, lenders aren’t willing to accept the losses on debt owed. But as long as these short sale listings have been approved, buyers can expect to strike a deal with the short sale sellers before the property hits the foreclosure market.
Buyers should also keep in mind that short sale properties are sold “as is.” So the property can be in either good or poor condition, but whatever the condition is, buyers take it on as part of the deal.
How to Find Short Sale Listings
Now that we’ve garnered some interest on this strategy, where exactly can real estate investors find short sale properties? You’re going to need to take on a proactive approach when trying to find short sale listings. Because short sales and foreclosures, on average, sell for approximately 30 percent less than a non-distressed property, expect there to be competition. These properties can offer some of the highest return on investment (ROI) so investors are going to be giving short sale listings a priority.
Here’s how to find investment properties in their pre-foreclosure stage (short sale listings).
1) Real Estate Websites
The internet should be your first stop when searching for short sale listings in your market. The great thing about using online directories and websites is that they offer important property details such as interior photos, condition of the property, and the number of bedrooms.
Real estate investors get a chance to do a quick search and find some prospective investments on websites like Zillow, Redfin, Auction.com, and RealtyTrac.com. They offer easy access to hundreds of short sale listings and can expand your investment property search from local to national listings.
Mashvisor is the best real estate investing website which offers access to real estate listings all across the nation. Our property search tools allow investors to finetune the search criteria so that they get a list of results matching their specific investment strategies. Through offering key data on property price, cash on cash return, cash flow, occupancy rate, and more, Mashvisor will help you find and analyze the best real estate investment deals in the market of your choice.
Now you can find short sale listings on Mashvisor, the one-stop platform where your investment property search begins and ends. The specific search criteria will show you the right listings, and when you’ve found a property you’re interested in, a full investment analysis is just a click away.
To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo.
3) Work With Real Estate Agents
Investors, especially beginners, shouldn’t shy away from asking for help. Real estate agents know the market well. They can definitely boost your career with a bit of insider input. They’re already part of a bigger network and work with lenders and banks. This means they would be the first to know about any real estate properties about to go into foreclosure.
Agents can also help you access the MLS and other databases that allow you to search specifically for short sale listings. It isn’t easy navigating the market when searching for short sale listings. Take advantage of your agent’s contacts to easily spot potential deals. Want to find top performing real estate agents in your city? Click here.
4) Public Records
Real estate investors can search for short sale listings in the public records of their county. Although public records don’t provide photos or detailed property descriptions, they do include the property address and the homeowner’s name. Generally, they also include the bank’s name that is doing the foreclosing and how much is owed on the property.
The lists you would want to look for would be
- Notice of Default
- Lis Pendens
- Notice of Sale
They can be found in:
- The County Recorder’s Office
- Title Companies
- Local or National List Providers
Although it’s a bit more time consuming than searching the web, using public records to find short sale listings has its pros. These records provide the most updated information on pre-foreclosure properties. Also, you will have less competition using them.
5) Real Estate Wholesalers
Real estate wholesalers will have access to short sale listings just because they’re already operating in neighborhoods full of sellers. They create buyer and seller lists which they save for their future wholesale deals. A plus from contacting wholesalers is they may be able to help you flip the investment property once you purchase it.