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