Short Sales -Real Estate Preforeclosure

        The foreclosure rate is soaring in most areas of the country presenting incredible opportunities for preforeclosure real estate investors!  There are a number of ways the informed real estate investor can profit from homes facing foreclosure and one of the most lucrative is the preforeclosure...               
                   "SHORT SALE!"  

         What is a short sale?  Read on....

        When a homeowner stops making payments on their mortgage loan the lender is left with no other choice but to begin a foreclosure action.  But lenders have a problem now - they are up to their necks in foreclosure properties!  

       They just can't afford to take back all those homes.  It's too expensive to hold them, repair them and then try to sell them.  That's where a short sale comes in.

        If the lender does not want to own the home what can he do when a owner stops making payments?   Well, one of the options lenders are using today is to help the borrower sell the home by forgiving a portion of the loan balance.  

        That's right, lenders will often allow a home to be sold for less than the amount still owing on the mortgage loan!  

      That's called a preforeclosure "SHORT SALE!"

       Really?  Will lenders really take less than what's owed?  Will they do a short sale?

       YES.... if you know how to ask!  You must convince them that discounting the mortgage is in their best interest.  You do that with a preforeclosure Short Sale Package.    

        The reason a lender requires a short sale package is to determine answers to the following three questions:

1. Does the homeowner truly deserve a short sale? 

2. Is it in the Lender's best interest to allow a short sale or foreclose and sell the house through a realtor? 

3. Are there any hidden factors that might cause the lender to lose money if they foreclosed on the home.

        The lender will always want to verify that the seller truly can't make the house payments before they will consider a short sale. 

       Before a lender will decided to accept a preforeclosure short sale he will take a detailed look at comparable home values, repair costs, realtor commissions, and holding costs. Some of the factors that will effect an preforeclosure investor's opportunity to arrange a short sale are: 

1. How many properties does the lender currently have in default?

2. How flexible is the corporation that made the loan?

3. Is a third party servicing the loan?

4. What is present policy of the loss mitigation department with which you are dealing?

        Don't expect a lender to accept a discount just because it sounds good to you. If the lender thinks they will get a higher payoff by taking back the house the lender will turn you down.  There are certain things you must do to make the lender understand that a preforeclosure SHORT SALE is his best option. 

       Once you know the secrets of what makes a preforeclosure SHORT SALE possible you have the key to startling profits.  With the proper short sale package a lender may take a discount of between 50% and 80% of what's still owing on the mortgage loan.

      For example, that means you may be able to buy a $100,000 home for $70,000..... an immediate profit of $30,000!

      Now you have an idea of the exciting opportunities available to those who understand how to put together a SHORT SALE. 

       We've only been able to give you a quick overview of the short sale process here.  There are other key things you must know to be successful with preforeclosure short sales.  If you would like to learn more click here!