Short Sales is one of the most popular terms in real estate today. What is a short sale? – It is the obtaining a property for a smaller amount than what is owed on it from the lender.
Because of recently declining prices in homes, banks and lending institutions are making more deals than they have in years making short sales a great opportunity for everyone involved. The huge increase in short sale activity is due to the increase in subprime lending and the Adjustable Rate Mortgages that were written over the last 5 years that are resetting at astronomical rates.
Because these homeowners are now unable to afford their mortgage payments and the homes are worth less than what they paid, they are looking for ways to avoid foreclosure and get out of a potentially bad situation. Enter the short sale….
There are several strategies to find a good deal through a short sale. GuReview.com has a distressed homes search and there are over 480,000 properties in preforeclosure as of today across the country. This is a good place to start researching potential deals in your area. Here is the link to search properties:
There are several methods to contact the properties you have identified as potential deals. Some investors send postcards or letters to these homeowners with catchy marketing phrases to get them to call. Bandit signs are also an effective strategy to market your services and get potential deals. Post the signs in the general areas that you want to target. Some investors actually go knocking to the homeowner’s door to check out the property and see if they may be interested in selling the property.
You have some great possibilities, now what? You know the profitability is there. There are many nuances and details in negotiating and putting together the short sale package to the bank. This can be a daunting and overwhelming process.
Hang in there and stay determined. A good piece of advice? Don’t try to do your first deal on your own without knowing the exact steps you need to take and give you confidence to close the deal. Take a short sales course or seminar to get the information your need. Attend a bootcamp or get a mentor. There are many educational options – the knowledge you gain will provide endless opportunities.
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