Short Sales- Negotiating Tips To Turn A Profit

Many short sale investors fail because they only look at that one type of deal and they really have no idea what they're getting into. And banks are no help because they are so busy with foreclosures these days that they really don't have time to teach people what to do. And if you don't know what you're talking about and try to fill out short sale paperwork and make an offer to the bank, you're not going to get a response because the bank doesn't want to hold your hand through the process. After all, desks that used to have a stack of 20 to 30 foreclosures on them now face hundreds of different properties which leave them less time to help others.

Fortunately, even when you're not a savvy veteran of the short sale game, you can still convince the bank that you know what you're doing. All you have to do to pretend to know what you're doing is to have your paperwork together and organized properly, and use the right technical lingo to make them feel like you're on the same level that they are. Once you impress them with your skills and knowledge (real or implied), you'll be able to fill out the offer forms and get a much quicker response on your short sales. Hang on a second. What is a short sale? Ultimately, it's just the process of going to the bank and offering to buy out a bad mortgage from them at a discounted price. They get their money and get rid of the home, so they're really into these sales.

It's amazing how many investors will work with properties that are over-financed and people who have no equity in the homes that they are having trouble with, simply because the sellers are easy to work with. However, these properties are often the worst ones to invest in. If the home is financed at 120% of the value, and is well located in good condition, you'll be lucky to discount it down to 80% or 85% of market value. Heck-if you want to buy homes at 80 cents on the dollar, you can get those low-profit deals without getting involved in foreclosures at all!

But if you want deals at 40-60% of market value so you can make some real money, you need to find the properties that are worth more than the loans that are owed.

One of the best ways to handle short sales is to avoid dealing with the seller at all. You can simply go to the bank and buy the smaller second mortgage or even the first mortgage for a much lower price and simply buy the debt. Many people give up on foreclosures because they can't find the seller, but you can guarantee that you'll be successful because you don't need the seller once you know how to profit!