I predict many real estate agents will have to adapt their business and target distressed real estate sellers.
Many real estate agents will have to understand how to list and sell short sales in order to help those people who are under water on their mortgage.
Short Sale Seller Example
Let’s say you know someone who has a home valued at $300,000. And let’s say they owe $300,000 and despite their low mortgage rate of 2.75%, they HAVE TO SELL. Well, unfortunately, even if you found someone to buy it for exactly what they owe on the property, they will have to cut a check at closing.
If closing costs are estimated to be around 8% with real estate commissions, title related closing costs and any state taxes, that could equate to $24,000 in the example above.
Unfortunately, many people do not have an additional $24k hidden in their mattress to come to the closing table. And, let’s say the only buyer you could find is around $280,000? That means they would have to cut a check at closing for $44,000.
Real Estate Short Sales Are The Answer
This seller, could be the ideal candidate for a short sale assuming, they couldn’t make money leasing it on a monthly basis. That would be my first approach. Can they lease the property out and cash flow it after all costs?
Unfortunately, for some, circumstances like a divorce could prevent logic from happening between two parties.
So, a short sale maybe the answer. But now… With the FED rate increasing and mortgage rates increasing, we are seeing the real estate market finally shift.
If more inventory hits the market from foreclosures to institutional investor inventory, we could see prices drop. Possible drastically. Thus, becoming a short sale expert is vital to a real estate agent’s business.
Learn more HERE on how to list and sell short sales. Help people avoid foreclosure with short sales.