The Malibu real estate market presents many opportunities for buying luxury homes and selling them for a profit,but finding ways to buy low and sell high is one of the biggest challenges of real estate investing. However,short sales give buyers the opportunity to buy at prices that are often below market value. Although this process has some risks for both buyers and sellers,the potential rewards are worth the groundwork required to find these low-priced properties.

What is a Short Sale?

When a homeowner gets behind on mortgage payments,the lender may agree to a short sale instead of foreclosure. “Short sale” means that the bank will accept a sum less than the amount due on the mortgage. If a homeowner still owes $200,000 on a loan,the bank may be willing to accept $175,000 in a short sale. Not all banks will agree to this type of sale,so homeowners must get permission before going through the process.

Benefits of Short Sales

Malibu short sales have one major benefit for buyers. This type of sale allows a buyer to purchase a home for less than the market value. If a homeowner bought a house for $600,000,owes $350,000 on the mortgage and convinces the bank to accept a short sale amount of $300,000,the buyer stands to make a considerable profit.

Risks of Short Sales

Short sales have risks for both buyers and sellers. A buyer can ask that the bank not issue a negative report to the major credit bureaus,but the lender is under no obligation to agree. Some lenders will also sue homeowners for the deficiency,which is the difference between the amount owed and the amount of the short sale. If a homeowner owes $100,000 on the loan and sells the home for $50,000,the lender could pursue the homeowner for the $50,000 difference.

Buyers also need to be aware of the risks associated with this type of sale. If the seller borrowed too much money,the home may not even be worth the short sale price. Additionally,not every seller qualifies to do a short sale. Buyers must be careful to work with reputable Malibu real estate agents to ensure that they are not wasting their time pursuing a deal that does not qualify as a short sale. Lenders also have the opportunity to change the terms of the sale before the deal closes. Market changes and new lending laws can cause buyers to lose money on this type of deal.

Timeframe

Buyers should set aside at least two months for the process of a short sale. The process starts when a notice of default is filed against the seller. The seller must work with the lender and submit all required paperwork before the lender will even consider a short sale. Once all the paperwork has been submitted,it may take up to two months to receive a response from the lender. If the seller has two mortgages with different lenders,it may take even longer to complete the process.

Russell Grether of Coldwell banker Previews International is a real estate agent based out of Malibu,CA. He specializes in Malibu real estate,Malibu homes for sale,Malibu properties,Malibu land for sale,Malibu rentals and surrounding area real estate from Montecito to the Pacific Palisades.

Rental properties can be an excellent source of income,but only if you are able to fill them with tenants. Landlords who do not know how to market their properties will have difficulty finding good tenants and may struggle to generate enough rental income to keep up with property taxes and maintenance costs. If you want to market one of your Malibu rentals,use these tips to make the process as painless as possible.

Determining How Much to Charge

You may not realize it,but the price you set for rent can help or hurt your marketing. If the price is too low,it could make potential tenants think that the property is in disrepair. If the price is too high,you will lose potential tenants to properties with rents that are more in line with your local market. One of the best ways to see what others are charging is by looking at the rental listings in your local newspaper. Look for ads for Malibu Point Dume homes that are similar to yours in size and available amenities. You can also look at real estate websites to get an idea of what other landlords are charging.

Lease Terms

Your lease terms also affect your marketing strategy in the Malibu real estate market. Although renters expect that they will not be able to make too many changes to a property,some landlords are now letting their tenants choose paint colors and flooring options. This makes the rental space more homey,which can keep tenants in place for longer periods. If you are very restrictive and do not allow tenants to make even basic changes,they may rent from someone who will allow a little more personalization. How long you are willing to rent is another consideration. Someone who just wants a short-term place to live will probably not consider an apartment or condo that comes with a two-year lease. Someone who is tired of moving around and wants to settle down might be put off by a six-month lease.

Staging

Home staging is no longer just for sellers. It is difficult for renters to picture themselves living in a property when there is no furniture and no personal touches. Staging the unit with some basic furniture,a vase of flowers and a few pictures can be just the thing you need to entice a new tenant to sign a lease.

Improvements

It is not easy to convince someone to rent a property when the fridge does not work and the carpet looks like it is worn right through to the floor below it. You have to decide which improvements you want to make,as making some basic repairs might be enough to successful market the property. Painting the walls,fixing flooring defects and repairing or replacing appliances is one way to make the property more marketable. It may not be worth it to make major repairs that cost a lot of money,as you may not be able to recoup those costs by renting the property.

Russell Grether of Coldwell Banker Previews International is a real estate agent based out of Malibu,CA. He specializes in Malibu real estate,Malibu homes for sale,Malibu properties,Malibu Land for sale,Malibu rentals and surrounding area real estate from Montecito to the Pacific Palisades.