If you have been looking at property development opportunities, you may have seen short sales and foreclosed properties listed for sale.
These seem like great chances to purchase a property for development at prices that may seem very affordable. But what is a short sale, how can it be an advantage for you, and what are some of the drawbacks that you need to be aware of? Here is the information that you need to know.
What a short sale is
A short sale is a property that is for sale for less than the amount of any property development mortgage opportunities or liens that are connected to that property.
If someone is having difficulty paying their mortgage but does not want to go into foreclosure, they may be able to get the financial institution that holds that mortgage to knock some of the debt off in order to sell the property. The theory is that a lower price may make it more appealing to buyers and that the bank will get some, if not all, of the money that they invested in the property.
Many properties went on the market as short sales due to the recent economic crisis. In some areas that were particularly hard hit there may be hundreds of these properties available for sale.
In some of these places the market is beginning to bounce back a little and some great properties are being snapped up at great prices.