Why Buy Short Sales


Hello my name is Greg Harrelson of Century 21 the Harrelson group, here in Myrtle Beach, South Carolina. I wanted to just take a few minutes just to discuss with you a new strategy that we see buyers taking or at least exercising in today’s market. Now when I talk about today’s market I’m referring to the time of year, remember it’s the fall season going into the winter season. So the topic today is why buyers are after short sales. You may not know but as a realtor I have noticed a recent surge in contracts on our short sale listings. The first thing I do of course when I see a trend like that or a shift a new trend, I start to look at the MLS and I determine what’s going on or I at least try to determine what is going on and talking with a lot of buyers I started to figure out that the buyers or investors in today’s market are starting to figure out how to capitalize on the short sale opportunity. So I want to talk to you real quick and share with you the two reasons why their telling me that they prefer to buy short sales in Myrtle Beach during the fall and winter months.

The first reason is that short sales a lot of times and you may of heard this short sales often take four, sometimes up to five months to actually close. From the moment you write a contract until the time that it actually closes and you take possession of the condo can sometimes be for four or five months. Now at first thought you may say, well why would such a long delayed closing be an advantage to me as an investor. Let me share with you, remember it’s at the end of September or approaching October. So if it took four to five months to actually go through the whole process and you bought the property in October or at least you wrote the contract and you started and got it accepted by the seller in October and that means November, January, February, March, April. It could be anywhere from March to April before you close on the property. So let me explain a little bit further. In October in Myrtle Beach, the summer is over, the rentals are starting to decline and we start to go through some negative cash flow months. In the spring and the summer, it’s when investors start making all their money on rentals, those are the positive months.

Short SaleSo that leads me to reason number two, buyers are telling me that they want to purchase short sales. Number two is you can control the property without absorbing the expense. Control without the expense. So here’s what it looks like. You write a contract today, its October 1st you now control the property any other contracts that come in they have to be back up contracts, they’re in second position. Agents only submit one offer to the banks at a time, so if you’re the person that has the offer then you’re in control in October when it’s negative cash flow and then all of a sudden in March or April you will be the owner when its positive cash flow. So you get to control it without the expense, you write a contract and you control it all through the fall, through the winter and then you purchase it in early spring right at the time when you’re getting ready to make some money. So this is a strategy that I recently noticed, I saw a little bit of it happening last year but not quite as aggressive and active as it is this year. So if you’re thinking of making a purchase any time in the next few months in Myrtle Beach, South Carolina you may want to consider this strategy. Yes there are still foreclosures for sale and yes there are still traditional listing’s on the market that are at good values. Yet if you’re looking to control a property while it’s in negative cash flow and take ownership right before it turns positive, then this strategy may work for you. Thank you for taking the time to listen to this strategy, I look forward to speaking to you in the future. My name is Greg Harrelson with Century 21. Happy Investing.