How to spot a real short sale investor

By
Real Estate Agent with Virtual Properties - Atlanta Real Estate 255736

How to spot a real short sale investor

 

Short Sale Investors call us all the time to make offers on our short sale listings. In this video and post we'll help cover how to spot a real offer and how to discover who is really interested in taking advantage of the low prices in the market and the "posers" who watched a late night webinar and bought a quick rich quick scheme. A true buyer or short sale investor will have a few things accompanying their offer.

Standardized Contract

An investor or any legitimate home buyer will use the standard contract that is common for the state. Real Buyers don't use funny forms. It's not uncommon for an offer to have special stipulations, but it is a red flag if there's an excessive number of pages. In Georgia, most offers consist of 10 or so pages.

Earnest Money

This one is controversial in some circles, but in my experience, if you don't have money on the home then you aren't a real buyer. Legally speaking, an offer can be made with as little as $10 in the deal (as custom) but if you are a buyer and are plausable about buying a home I have listed, I expect at least 1% of the purchase price as earnest money. It's just an act of good faith that if you have the money to buy the home, then you can show a little of it.

Proof of Funds

Here's a place where many webinar investors get agents and short sale sellers alike. Their short sale offer will contain an approval letter for transactional funding. That might sound confusing but basically the number one scam being run in Georgia has supposed short sale investors buying a property using what's called transactional hard money funding. This type of "funding" is generally for one day at a very high price. These type of investors are exactly the ones we want to get rid of, as they plan to sell the property the next day. While there is nothing bad with profiting from a short sale and "flipping" the home the next day, it's nearly impossible in the state of Georgia and furthermore most investors have not done this type of transaction ever before and are "TRYING" it out on your house.

Comments (1)

Tanya Van Blake-Coleman
Van Blake-Coleman Realty, St. Thomas/www.talk-to-Tanya.com - St Thomas, VI
Improving the Quality of Your Life

Hi Joshua,


Good information. We have not yet seen many short sales here so every bit of information is news for the most part.

 

Thanks,

 

Tanya

Oct 21, 2011 08:03 AM