| Short sales aren't for everyone, but there's | | | | because you're involved in a short sale |
| often a significant amount of money to be | | | | negotiation.)You'll generally have to work |
| made when buying a property from a lender | | | | fairly closely with the home owners to |
| before a home has been foreclosed. So even | | | | construct a strong hardship letter and to |
| though they can be frustrating experiences, | | | | compile all the various things a lender will |
| short sales may be worth checking into as one | | | | ask for, such as pay stubs, bank statements, |
| of your real estate investment avenues. Here | | | | and personal finance information. Lender |
| are a few suggestions for successfully | | | | requirements will vary, but all of them will |
| negotiating short sales owners and | | | | require a sales contract between you and the |
| lenders.First, if you approach the home | | | | homeowners. They'll also want to see a |
| owners sympathetically, you'll have a much | | | | broker's price opinion (BPO) before they |
| higher percentage of success. Remember, | | | | decide whether or not to accept your short |
| they're in a financial bind, otherwise they | | | | sale offer.The earlier you can step into the |
| wouldn't be facing foreclosure and the | | | | foreclosure process, the better, because you |
| potential destruction of their credit rating, | | | | want to be able to help the home owners to |
| so when you talk with them about putting | | | | jump through all the various hoops in time to |
| together a short sale, bear that in mind. | | | | close the short sale before the foreclosure |
| You're going to need their help throughout | | | | date. Generally, 90 days will be enough time, |
| the process, so be as gentle and | | | | but there are always variables, and the |
| understanding as possible. After all, once | | | | things lenders can ask for can often be |
| the short sale is completed, their loan will | | | | frustrating and time-consuming.Your goal |
| show on their credit report as "paid," rather | | | | should be to seek out properties in which the |
| than being a huge negative mark against their | | | | owners have little or no equity. Your chances |
| credit score. There will be a notation on | | | | of completing a short sale will increase if |
| their report that indicates the home was sold | | | | there's not much profit to be made if the |
| for less than the original loan amount, but | | | | lender should decide to go through with the |
| it's better than foreclosure.Also, remember | | | | foreclosure process. If there's a wide |
| that a short sale is being negotiated while | | | | spread, the lender might do better to |
| the foreclosure clock is ticking. You have to | | | | foreclose and sell the property as a |
| move relatively quickly if you want the sale | | | | repossessed home at a price closer to its |
| to be complete before a sheriff sale or | | | | market value.Again, they're not for everyone, |
| public auction is held. (There are some | | | | but short sales can often make a significant |
| lenders that will halt the foreclosure | | | | profit if you're willing to work closely with |
| process until a short sale has been completed | | | | stressed homeowners and the sometimes |
| or rejected, but that's not always true, so | | | | arbitrary demands of lenders. |
| don't assume the clock will stop ticking just | | | | |