Tips for Massachusetts Short Sale Investors!

Short Sale Investors

We are called quite frequently by Massachusetts Real Estate Investors looking to buy a short sale we may have listed, and asking what the best way to get them the property is. There is no magic ball for an investor to buy a short sale, but they’re certainly are things that will help the process when writing your offer.

Here are my tips when buying a short sale:

•  If you are an LLC, INC. Trust, or some other entity other than an individual, provide your “creation” documents, either article of organization, trust docs, etc. Sellers lenders will frequently request this to review information.

•  If you are using a HARD MONEY LENDER, you are NOT a CASH BUYER. If you check you are a cash buyer and your company is an LLC, the seller’s lender will want to see a copy of your bank statements. When a hard money lender issues you pre-approval, that’s exactly what it is, it’s a letter saying you are APPROVED to buy the sale, but your offer should be written as FINANCED without a contingency. If you are using hard money, just write in that it’s not contingent upon anything, like an appraisal (although I do know some hard money lenders want appraisals). The bottom line is you need a bank statement showing you can buy the property if you are a true cash buyer, so submit your offer accordingly AND your bank statement if you are a cash buyer.

•  Know your numbers. Selling banks are not going to consider a low-ball number. If you are trying to buy the property for a certain price, have your back up ready. You should have repair estimates on hand, inspections, appraisals, comps, pictures of the property and any damage, and any other information pertaining to the sale that would affect the property value. Be prepared to support the value you are offering.

•  I was talking to an investor last week, and I told the person Zillow and Trulia were listing the property value at $110,000 and the investor’s offer was in the $40,000 range. Now I know Zillow and Trulia are NOT ACCURATE, but they ARE a gauge. Once the investor told me about the chemical plant across the street and the work needed on the property, it made a lot more sense to me on WHY they were offering such a low amount. If you do plan on submitting a low offer, be prepared to bullet point out WHY certain things affect the value so that we can submit it to the seller’s lender.

•  UNDERSTAND WHAT SOLD AS-IS MEANS! This means the seller has no money to fix things on the property, remove snow, winterize pipes, pay past due utility bills, get smoke certs or title V, or bring money to closing. 99% of short sale homeowners, do not have excess funds. If they did, then they’d be able to pay their mortgages. Many times, an investor will need to assist paying off an execution, or other non-mortgage liens on title. The seller will NOT be cleaning the property at closing and you may have to take ownership of the property subject to the tenants still being there. Many times, the bank has taken possession of the property so you will have to change the locks. These are all things to consider when submitting your offer.

•  Ask if the loan is backed by Ocwen or Nationstar and if so, back away quickly. Both servicers will take your offer, not respond, and then put the property up on Hubzu or for other investors to bid on, even though you have an executed contract. I know, I know, it stinks, but any NON-GSE loan will end there and you don’t want to go through the work to lose the property to a higher bidder.

•  Just because it’s a foreclosure, does not mean it’s a SHORT SALE. I get one call a week from eager investors who see a property going into foreclosure and they call looking for short sale advice in Massachusetts. JUST because a property is being foreclosed upon does not mean it’s a short sale. The homeowner must have NEGATIVE EQUITY. If the homeowner has equity and is being foreclosed, they can just list it online and get a traditional buyer and pay their loan off, so this goes back to knowing numbers.

That’s it for now, but as I think of more things, I’ll let you know.


For Realtors, Attorneys, Title companies, etc interested in our services please go to

For homeowners needing assistance with avoiding foreclosure please go to

2500 Main Street,
Tewksbury, MA 01876

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