| For decades, real estate investors have been making | | | | The first thing the lender will be concerned with is how |
| millions helping people in financial trouble. One method | | | | much the property is worth. To find that out, they will |
| that many investors don't fully understand is the short | | | | generally hire either a broker or an appraiser to |
| sale. | | | | physically inspect the property and then offer a price |
| As a real estate investor, you'll run across a number of | | | | opinion. You may be able to help your cause if you |
| homes that are currently in foreclosure and in which | | | | can offer your own price opinion, based on pertinent |
| the seller has no real equity. That typically means that | | | | sales information in the area. |
| if you want to buy the property, you'll have to | | | | It will also be helpful to provide as much negative |
| negotiate with the lender directly. Since lenders are | | | | information about the property and the area as you |
| often willing to take considerably less than retail for | | | | can. Be as specific as possible about the drawbacks |
| foreclosure properties, such transactions are generally | | | | to the home, the neighborhood, the local economy, or |
| referred to as short sales, and though they can be | | | | anything else that will show the home in the worst |
| frustrating, short sales can generate significant profits, | | | | possible light. You can also provide bids from |
| as well. | | | | contractors as to how much it will take to repair or |
| One of the most frustrating parts of short sales is | | | | upgrade the home, in order to further illustrate how |
| simply locating the person with the power to negotiate | | | | much the lender will be saving by selling the home to |
| the sale. Although the names vary, most lenders have | | | | you. |
| a department that handles short sales. You'll probably | | | | The lender will also want to know about the current |
| spend a considerable amount of time on the phone | | | | borrower's situation. This may require you to work with |
| while you're referred back and forth within the | | | | the borrower to create what's called a hardship letter, |
| organization until you finally find the right person. | | | | giving intimate details on how difficult it will be to |
| However, once you've found that person, you can | | | | continue making the mortgage payments. It can be a |
| often negotiate an attractive deal. | | | | time-consuming and tedious process, but it can pay big |
| But why would a lender sell a property at a | | | | dividends. The lender will often require a written |
| below-market price with special terms? The answer is | | | | contract between you and the seller to make sure the |
| pure economics. A short sale allows the lender to | | | | seller doesn't make any money on the sale. Your first |
| avoid a number of the costs they typically incur during | | | | bid may be rejected, but you can often get a better |
| the foreclosure process, such as attorney's fees, | | | | deal than you'd get with a regular seller, because |
| eviction costs, property damage, and the costs of | | | | lenders have no emotional attachment to the property. |
| listing with a real estate agent. So, to get a good buy, | | | | Short sales can be frustrating, but they also offer the |
| your task is to convince the lender that it's in their best | | | | potential for excellent profits. |
| interest to accept your offer. | | | | Copyright © 2006 Jeanette J. |