Short Sales are the cheaper way to make a real estate fortune

For real estate investors that are new to the market, the only way to make money is to buy foreclosures. However, there is another way of buying homes that is affordable and actually less pricy because there is usually less damage done to the house because the owners didn’t leave under bad terms.

If investors can negotiate a short sale with the lender, they can not only have a inexpensive home purchase, but they can have small, easy payments to make on the home as well. As a real estate investor, it is your goal to convince the bank that a home with an upside down mortgage should sell for less than is owed because it isn’t worth that price anymore.

Once you have decided on an agreement with the homeowner who is willing to do anything to stop foreclosure and you have your paperwork in order, you are ready to deal with the loss mitigation department of the bank. Lenders understand that in this market short sales are necessary in order to keep from losing too much money, but that doesn’t mean the process is any easier.

Because the loss mitigation departments at banks are overloaded with foreclosures, it’s easier to sell them on the advantages of agreeing to a short sale, which helps get rid of unwanted properties and avoid certain foreclosure expenses, such as court costs, bankruptcies, repairs and marketing. As the investor, make sure to mention these benefits of a short sale to the lender in order to convince the bank that a short sale is the best option.

In order to convince lenders that a short sale is the best option, have all the paperwork lender’s require ready to submit, and have them already signed by the homeowners. The short sale lender may ask for the homeowner's permission for the bank to speak to you, a purchase and sale agreement, a letter showing why the homeowner can't make the mortgage payments, a financial statement showing the assets, liabilities, incomes & expenses and a net sheet showing the bank what they will get.