The careful short sale investor does careful research before placing an offer on a property. There’s no reason to rush a short sale offer; the bank is likely to take weeks or even months to approve the sale. In addition, the bank may be entertaining several short sale offers on a property. Each new offer slows the bank’s decision.

In other words, time is on your side. Take the time you need to do careful research about the short sale property and the surrounding area. Check out the property thoroughly and find out whether there are any other existing liens on the home, unpaid taxes or assessments, or modifications that must be made at the time of sale. Examine any covenants that may be associated with the property and understand what the covenants require and prohibit.

Do careful research on the re-sale value of the home, the attributes of the neighborhood, the crime rate, and the local schools. All of these elements will factor into your ability to find a new buyer for the home. Determine, if possible, the utilities costs associated with the home.

Based on what you find, determine whether you have any ability to mitigate the things that are likely to ruin a potential sale. There are certain things you can’t change – the local schools, for example - but you can provide prospective buyers with a list of private schools in the area and their Open House dates. If water rates are high, or winters are cold, you might factor the need to add water-saving fixtures or extra insulation into your short sale offer. Once you’ve closed on the property, make those investments for the sake of being able to sell the property more easily.

Your research might even include talking to the neighbors about the home and the surrounding area. Neighbors are often willing to provide information you won’t find elsewhere. Your research should help you create a picture of the ideal buyer for your home, and should guide your future investments.

Photo Credit: Todd Ehlers, via Flickr