How to do a short sale

Doing a short sale involves four major steps. The first step is working with the homeowner. Once you've made your case, you need to reach an agreement with the homeowner and solidify it in a contract. As with any home buying situation, contracts can be gotten out of, but it's difficult and a penalty is usually involved. With a contract, you're protecting the time and energy you've already invested in the venture. The homeowner is less likely to back out once a contract has been signed.

Next, contact the lender and ask for their information packet about short sales. Every lender requires different information, and this packet will ensure that you give the lender everything they need. At a minimum, you'll probably be asked for the following pieces of information: * A letter from the homeowner explaining why he is substantially behind on his mortgage payments * Financial information about the homeowner, including bank statements and pay stubs * Copies of the original sales agreements and contracts

The third step is getting a broker's price opinion, referred to as a BPO for short. A BPO is an evaluation of a property's value performed by a real estate agent who's selected by the lender. Getting the lowest BPO possible is the cornerstone of a profitable short sale. As the real estate investor, you have to take proactive steps to influence the agent to set a low BPO. For instance, you should be present at the evaluation and prepared to point out necessary repairs and cost estimates for having the repairs performed.

Now it's in the hands of the lender. The last step is waiting for the lender to accept or reject your offer. If the lender accepts your offer, you're ready to close on the deal. If the offer is rejected, all is not lost. You can continue the negotiations, and you may even be able to get a second BPO.

As a real estate investor, the short sale is one of the most effective and efficient strategies at your disposal. The process is simple and the prime candidates are easy to spot. With foreclosure rates soaring, and showing no signs of leveling off, now is the time to put the short sale to work. Check out http://www.ForeclosuresUnleashed.net for how you can soar your profits with foreclosures.

Page 2 of 2 :: First | Last :: Prev | 1 2 | Next