Deadly Mistakes New Investors Make in Short Sale Investing

"Investing in a real estate short sale can be a good financial move, especially if you’re after a quick profit. But at the end of the day, a short sale is still a big investment, and that means you have much to lose if you make a wrong move. Many investors have joined the real estate short sale market, but it hasn’t paid off for all of them. If you’re thinking of joining the trend, here are five common mistakes you should watch out for.
 

1) Expecting Quick Cash
 

Never go into any investment—whether it’s a real estate short sale or a foreclosure—hoping you’ll get rich in 30 days. The best short sale investors hope for the best but are always prepared for the worst. This means they’re always covered when something doesn’t work out, a common occurrence in the real estate short sale market. Work to get the best results, but be prepared to put in the time and effort it takes.
 

2) Shutting Out Prospects
 

It’s common knowledge that not every real estate short sale pushes through. So there isn’t much sense in focusing on one home, especially with such a large inventory of distressed properties. Real estate short sale buyers can legally walk away from potential deals, so take advantage of that. Keep your options open—the perfect home may just be a couple of blocks from the one you’re looking at!
 

3) Setting Tight Deadlines
 

Short sales follow strict deadlines, and small delays on your part can break the entire deal. Always make room for delays when scheduling steps such as inspections, title searches, and applying for pre approval. Experts suggest making a quick estimate of the time a specific step would take, and then doubling the time. This leaves you ample room for delays and takes a lot of pressure of your shoulders.
 

4) Skipping The Inspection
 

Home inspections are a vital part of every real estate short sale. Unfortunately, many new investors simply skim it over, thinking the home looks good enough from the outside. Often, they end up with extensive repairs to pay for, and any savings they make from the real estate short sale gets wiped out by the costs. Avoid this by paying attention to small details and getting a good insurance policy from your inspector.
 

5) Overpaying
 

True, short sales can give you a sizable cut, but that doesn’t mean you can’t bargain. Do your research and find out how much a home is really worth in today’s market. Your agent can help you look up similar properties that have sold in the area for the past six months, and compare it against the asking price to see if you’re really getting a good deal."