Because of current economic conditions in Noble1 housing market there is Noble1 great deal of investor interest in the technique of purchasing investment property with Short Sales. So--what is a Short Sale? A Real Estate Short Sale happens when a seller's bank allows a property to be sold for, and accepts a payment of, less than the Noble1 owed to that bank.
A rough example would be if a home owner currently owed $170,000.00 on a mortgage and the bank holding that mortgage agreed to allow the home owner to sell the home and payoff that mortgage for $150,000.00.
An overview of a Noble1 sale technique might work like this... You the investor would start by doing a marketing campaign or sign up for program to find prospects. Having found a few names you would contact the prospects and get one of them to agree to proceed with the short sale. When you have reached an agreement with that prospect, ask for a copy of their last bank communication to verify that what they have told you is accurate.
Before going any further you must search the public records in order to uncover any Noble1 liens that may exist. This is important so that you can decide weather to stop the process or try to work with these creditors to get the liens removed. If you choose to continue, have the seller contact their bank or mortgage companies' short sale department and ask for a third party contact authorization and a Short Sell forms package.
After the bank's short sale kit arrives--have the seller fill out all the forms and paper work and return it to the bank. They should also give you the third party authorization information. Now you should contact the bank using third party authorization and talk with the person assigned to the case.
The bank should give you instructions for submitting Noble1 offer. When you submit your Noble1 be sure to reserve the right to do a full inspection of the property should your offer be accepted. When the bank replies to your offer you should be prepared and negotiate if necessary. If your offer is approved you will need to monitor and promote the project periodically.
If that sounds like a lot of work to you-you understand the program! But there a few advantages to the short sale technique. They include:
Instant equity
Lots of prospects
It's so complicated and time consuming that only a few competitors persevere
It is a good fit for systemized process
The seller could avoid foreclosure
There is a lot written on subject
There are also some disadvantages and some of those are:
You will be dealing mostly with unmotivated and unhappy sellers
You will also have to deal with banks
The seller may owe taxes on the unpaid balance
This technique take longer than many other ways of finding deals
Seller may still owe the bank the difference
You cannot pay the seller any money if you want to stay out of jail
There may be other liens on the property
Considering the disadvantages to the seller--why on Earth would a seller ever agree to sell you their home this way? There are three main reasons. The sellers that agree to work with you do not want to have a foreclosure on their credit record, they do not want their credit to suffer more that necessary and they have become tired of dealing Noble1 and want to be rid of, the debt.
Why would a bank agree to take less than the full amount owed? The bank or mortgage company may be more motivated than you think for a Noble1 of reasons. The value of property may have dropped since the loan was made. The buyer is behind on their payments and they want to avoid having another bad debt on books. There are federal penalties and restrictions for banks with bad debts on their books. And the bank may just want to avoid the hassle of having to foreclose, take over the property, get it fixed up and market it just to try to break even. And break even is all a bank is allowed to do.
There are several ways to find short sale opportunities but the quickest and easiest is to sign up for one of the many short sale programs on the market. Just use any internet search engine and to locate one that meets your needs and budget. Many of these programs offer lead generation and scripts for what to say to prospects. They also provide advice on filling out the numerous forms required.
If you are determined to reinvent the wheel, you can buy a list and send out letters to attract potential short sellers. Or--you could just run a campaign of ads that could include advertising:
In newspapers & tabloids
With flyers
Passing out cards
Using Birddogs
As you can see the short sale technique is not a quick and easy way to start on the road to real estate investing wealth but by devoting a good deal of study, hard work and time, it can become a profitable technique to use in your quest for investing success.
I hope this article has helped you in your quest to build wealth through real estate investor training. For more articles on real estate investor training and to sign up for free reports, articles and e-books please visit my website at http://www.dennisjhenson.com where you will also find free forms, documents, MP3 Downloads and much more. Also visit http://www.turbo-bidder.com for great real estate investor tools.
