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Negotiating A Short Sale ? The High Road to Huge Foreclosure Profits Business Articles | August 18 nike air force 1 high womens sale , 2005

Buying foreclosures is the road to high profits in real estate. Learning how to negotiate the short sale is an art every real estate investor needs to perfect. Learn the key points on how to deal with the bank?s or lender's loss mitigation department and negotiate to maximize the profit on the foreclosure house. Even if you're just getting started in real estate investing, the short sale is a great way to become a successful real estate investor.



Buying foreclosures can be extremely profitable for real estate investors. However, most of these homeowners are mortgaged to the hilt. They have no equity, and big loan payments. In fact, many actually owe more than the property is worth!


Most investors will walk away from these deals because they see no obvious profit. However nike air force 1 high mens sale , you can ?create? your own equity by negotiating a ?Short Sale? with the bank or lender.


What is a Short Sale?


The concept behind the short sale is simple: your goal as a real estate investor is to convince the bank to sell for less that is owed as payment in full. Of course, this concept is easy ? buy the foreclosure from the bank at a big discount, sell the real estate, and make money!


How to Negotiate the Short Sale with the Mortgage Holder


Once you have your secured a contract with the homeowner and have your paperwork in order, you?ll be ready to deal with the loss mitigation department of the bank. Short Sales success relies on dealing with the loss mitigation department at the bank. Although most lenders look at short sales as a necessary evil within the lending industry nike air force 1 high sale , that doesn?t mean that the bank will just roll over and do your bidding.


Understand the Bank?s Perspective


With foreclosures at a 52-year high, the loss mitigation department at the bank is busy, if not highly overworked. Turn this disadvantage into an advantage ? sell them the benefits of your short sale.


Short sales contracts help lenders unload unwanted property and spare many expenses associated with the foreclosure process. These expenses include, but are not limited to, court costs nike air force 1 low womens sale , bankruptcies, repairs and marketing. This is in addition to the $300,000 to $800,000 (or more!) normally held in reserve by lenders. Federal regulations require this reserve, which is usually many times over the actual price of the bad debt.


As the investor nike air force 1 low mens sale , keep these benefits at the top of your mind. After all, it?s up to you to convince the lender that cutting their losses short is the best option.


It?s time to hone your negotiating skills. Here are 3 Steps to help you out.


Step 1: Have Your Paperwork Ready


There is paperwork that all lenders will require in order for you to submit your offer for the short sale. Second, many of the larger institutional lenders have their own short sale package (their own forms to be filled out and signed).


Since many of these forms have to be signed by the homeowner(s), it?s best to have them with you when you meet with the homeowner to work out a deal. At a minimum you should have the homeowner fill out andor sign:

Authorization to Release Information (homeowner?s permission for the bank to speak to you) Purchase and Sale Agreement Hardship letter (showing why the homeowner can?t make the mortgage payments) Financial statement (showing the assets, liabilities nike air force 1 low sale , incomes & expenses) Estimated HUD1 or Net sheet (showing the bank what they will get)

Second, find out if the lender has a package they want completed. You can do this usually by calling the lender and asking them to fax you the package. Get the lender information from the homeowner in a phone call, so you can get the package before you go out to the house.


Step 2: Approaching the Loss Mitigation Department:


One of the first challenges you?ll face with the bank is getting your call to the right person. Some banks have systems set up in a way that when you call put in the homeowner?s account number, the call transfers to the appropriate department.


If the bank doesn?t have a system like this, c