A short sale is a pre-foreclosure and the trend in real estate investment today. In a short sale, your offer is negotiated with mortgage holder to accept *less* than what the seller owes on the mortgage. Why would a bank accept less than the mortgage and accept a short sale offer? Because the home owner is about to foreclose and the bank will have to take the property. Banks not only want to avoid defaulting loans on the books but statistics show that a forclosure will "net" the lender 27% less for the property. The loss is due to legal fees and loss in value due to abandonment.

How to purchase short sale property?
1. Locate a property listed in the MLS
2. Have your Realtor suggest an acceptable offer
3. Write an "As Is" offer for the homeowner to sign.
4. Proof of Funds or a Pre-Approval not more than 30 days old must included with your offer.
5. If your offer is accepted, be prepared to wait a few months.

The bank will require the following from the seller for a short sale offer:
1. A CMA and explanation of offer price.
2. An AS IS sales contract
3. A net sheet showing the bank exactly how much they will net after closing costs, taxes, etc. are paid.
4. A financial statement, bank statements, tax returns, W-2's, pay stubs
5. A hardship letter from the homeowner.
6. Estimated list and cost of repairs, using retail repair prices that the normal homeowner would pay for these items.
7. The bank will require that your hire a Realtor. Banks pay our fee directly.

Should you hire a Realtor?
1. A Realtor has all the forms and is trained to negotiate with the banks.
2. A real estate agent will prepare contracts, net sheets, CMA's, help negotiate with home owners and banks.
3. A real estate agent can estimate the resale price of the property and save you from a bad investment.
4. A real estate agent can resell the property for a profit so you can make the most from the investment.

This coming year in Cape Coral, there will be more pre-foreclosure shorts than any other property on the market