If you haven’t read “Santa Cruz Real Estate Investing: Buying a Short Sale Steps 1 through 5,” start there. This blog post provides steps 5 through 9 of the short sale process.
6. Visit the Santa Cruz real estate on your short list. You’ve already searched for short sales, researched them and narrowed your list to a few short sales that meet your criteria and have the best chance of making it to closing. Now it’s time to personally visit the few on your short list. Your primary purpose in visiting the property is to get an estimate as to how much it’s going to cost you to repair the home. As a real estate investor, you want a property that needs some work so that the average home buyer won’t want it, and you can get it at a lower-than-average price. But, you also want a property that is in good enough condition that the cost of the property plus repairs still gives you a good return on your investment.
7. Get a home inspection. Since short sales are typically sold “as is,” it’s crucial that you have a licensed home inspector evaluate the condition of the short sale that you’ve decided is the one you want to buy. An inspection will find problems you might not have been able to see in your initial visit to the home. It will also give you a more precise idea of how much it’s going to cost you to repair and renovate the property.
8. Make an offer. Now that you've found the short sale you want to buy, you’re ready to prepare an offer. Have your Santa Cruz real estate agent prepare all the documentation and submit the offer to the seller’s agent. The seller’s agent will submit the documentation to the lender. Hopefully, you’ve chosen a short sale with only one lender, but if there is more than one lender, remember that all lenders have to agree on the terms of the sale.
9. Make a counter offer or walk away. After getting your offer, the lender has his real estate agent evaluate the offer. More than likely the lender will make a counteroffer. That’s the time for you to do a final evaluation. Double check your numbers using the higher purchase price and ask yourself, “Is this property really going to give me the profit I want?” If the answer to this question is no, or if you’ve already reached the maximum you’re willing to pay for the property, it’s time to walk away.
10. Finalize the deal. After you, the seller and the lender have all reached an agreement, get everything in writing and officially record it. Go to closing, and the property is now yours. Congratulations!
If you’re a Santa Cruz real estate investor looking for a well-priced property to invest in, I can help. Give me a call today at (831) 662-6522 or email me at Lauren@LaurenSpencer.com.
For more information, please visit my website at www.MySantaCruzRealEstate.com.