The Single Most Important Document When Conducting a Real Estate Short Sale
This article is going to presume you know the basics of how to complete a real estate short sale. I’ve conducted several real estate short sales and the one document that keeps proving its weight in gold is the “contractor estimate.” This is the written repair estimate you get from a licensed contractor. You need to meet with the contractor prior to the BPO and have them give you a line by line item of all the repairs needed on the house.
I always tell my contractor to give me a liberal estimate. I don’t want it to be unrealistically high, but I want them to give me a number that is on the higher side of the estimate. The reason I do this is so that I can present it to the broker conducting the BPO in hopes that they pass it along to the lender (which they usually do). This helps me with my negotiations as the bank can see line by line which items need repair.
Typically, I let my contractor know that I am not wanting them to provide me an estimate for a potential job. I explain that I use it as a negotiating tool. As such, I give them some money for their time since usually the bids are free. In some cases, I actually do end up buying the house (as opposed to flipping it) and I go back to that contractor to do the repair work. Of course, when it comes to actually paying for the repair, I negotiate that down as much as possible ;0)
About the author: Pete Perrelli is a leading real estate investor who has bought and sold millions of dollars worth of real estate. Beginning in 2000, Pete was able to amass a net worth of over one million dollars in just a few short years and all before he turned 29!
In his ebook, Making Money in a Real Estate Bubble Burst without the use of a Hammer, Pete describes the step-by-step approach to making money using a real estate short sale technique.
