Foreclosure Short Sale

The seller wins by avoiding foreclosure by selling their home before the foreclosure auction even if they owe more than its worth.

If sellers were to sell their home foreclosures the traditional real estate transaction with a realtor without a short sale, typically they would have to bring tens of thousands of dollars to the closing to sell their own home. This is not an option for them because they are in foreclosure and don’t have any money.

Sometimes they are able to get some moving money out of the deal where they would get nothing if they lost the home back as a bank foreclosure. A bank foreclosure is also known as an reo.

The Lender wins because they are getting some of their bad debt paid off.

You see, when a lender has delinquent loans on their books, it affects how much money they can lend out in new loans because they are regulated by the FDIC. So the more bad loans they can get rid of, the more good loans they can then go ahead and acquire.

Also by taking a home to auction, they lender will lose 35-50 thousand dollars. So it’s a huge cost savings to them to do a short sale before the auction occurs.

The investor wins because we get to make a great profit on home, most of the time in the area of 25-200 thousand dollars, that we have invested little money in, have not had to own our credit at risk and we haven’t had to rehab the property.

Most of the time we are able to get these properties at 60 cents on the dollar and they are in great condition. I have acquired homes through short sales in bad condition for as low as 28 cents on the dollar. That means I was able to acquire a home for 28 cents on the dollar by doing a short sale with the lender.

It benefits Realtors because in today’s market Realtors are getting tons of listings with no equity and they can turn these dead leads into strong commission checks that they wouldn’t get without knowing how to help their sellers out with a short sale. It benefits investors because they are getting a lot of leads now from sellers that owe more than their house is worth. The only option for them is to do a short sale.

And the short sale business for investors is awesome in this market because you don’t have to make payments on the house, you don’t have to make repairs to the home, you don’t have to put your credit on the line to do the deal and you make a huge profit just for structuring the whole deal. The best part is you can control large luxury style homes while generating exponentially more profit than starter homes without any risk. You make ten times more profit on a luxury home than a starter home and its that same amount of work and still no risk.

Home Foreclosures are at an all time high and it is your time to get in the game and help out some needful homeowners while make a boatload of cash along the way. Short Sales need to be a part of every investor’s real estate investment strategy in today’s mortgage and housing market.