subject: How To Maximize Your Profits With Short Sales [print this page] Short sales are often given a bad reputation in the world of real estate. The reason for this is because about 90% of the investors out there only perform the one type of short sale, the most obvious one. They invest in houses that have a lot of debt on them and are often over-financed to the point where the seller owes 10% to 50% more than the home is actually worth.
This is the most obvious choice for short sales because they are so easy to find, and easy to negotiate with the seller. But this type of overleveraged deal is also one of the most difficult transactions to complete, and nearly impossible, barring unusual circumstances, to buy at a price that makes it work for us as Investors.
Getting a bank to accept 90% or so of market value as full payoff on a fast sale is easy, but getting great deals- 30% below market or more- is nearly impossible when the seller owes more than full value on a nice house in a nice neighborhood, which is why most people give up on short sales so easily. In the world of preforeclosures, though, there are other types of short sales to consider.
Banks don't have time to teach you how to do a short sale. Many people who try to buy homes at a discount directly from the bank, or short sale the home, don't know what they're doing. Think about it this way: bankers that used to have a list of maybe 20 or 30 foreclosures now have hundreds to deal with. And they aren't penalized for owning properties so teaching you how to buy them isn't exactly in their scheduled plans.
Fortunately, you can learn how to do short sales. As long as you understand the basics and tell the bank what they need to know, you'll be in business in no time. Take a look at the following:
'Hi, I'm calling about a short sale. I'm friends with the guy that owns this place and I'm trying to help him work something out so he doesn't lose his home. What do I need to do?'
'Listen, we are investors. We know what we are doing. I have everything you could need to be able to do this short sale. Just tell me what you need me to send you from the seller for you to give it your okay."
You've probably already guessed that the second one is going to get a better response. Of course, you can avoid a lot of complications in the short sale world by dealing with the lien holder directly. When you cut out the seller, you can often get better deals and quicker profits in your short sales and preforeclosures.
