Short Sale Madness

Many investors today are chasing the ‘short sale’ as a viable preforeclosure strategy. However, they are finding that the short-sale is really a long sale.

The one thing to remember about short sales is that you may be able to short the mortgage on the home but you’ll have to be long in patience! With the advent of the government encouraged loan modification process, the short sale process has become even more cumbersome.

If you have a short sale strategy, you should have other strategies also. Many times short sales offers never get accepted because lenders are overwhelmed and do not have the staff or decision making powers to move the transaction to acceptance.

If you are entering into a short sale negotiation with a bank you should have the ability to close quickly and have the willingness to wait blindly. Patience is usually the key to success in these situations.

What you need is viable strategies…

Steps to Success

With the government encouraging banks to modify loans and keep homeowners in their homes, short sales are becoming tougher. To succeed you’ll need to modify your strategies.

First remember that you’ll have to work within the system and that will be frustrating. Your tactic may require you be flexible. One tactic that many investors are employing is a total investment of time.

This means they inform the Realtor and the lender that should a short sale not work out, they are willing to wait through the foreclosure process and continue the negotiation process once the property comes out of foreclosure.

Another tactic is multiple offers. Some experts suggest putting a 48 hour limit on acceptance of the contract. This way they can make several offers in a very short period of time without being committed to closing on all of them.

In this way the investor can continue to take advantage of every opportunity. Since very few short sale transactions actually end a successful contract, having the ability to negotiate several contracts at a time is critically important.

Finally, to create the most success some savvy investors have started to employ short sale experts. This can be tricky because there are many people who claim to be short sale experts but few really are.

Make sure your short sale expert is a professional. Check references; make sure they have the necessary skill sets. Many experts recommend only using attorneys or qualified real estate agents.

Avoid anyone who just took a course on the subject and no real estate experience. To be successful you’ll need real professionals that understand the law and understand how to speak to attorneys.

The bottom line is this, in these days and times when bank REO departments are overwhelmed and the government is exerted more and more regulation over bank policies invests will need more than a short sale strategy to score great deals!

Michael Gross is the President of Dividend America Mortgage and has been in real estate for over 20 years. He has been a builder, a Realtor, an appraiser, and currently he is a lender and an active real estate investor. He uses all of his experience and knowledge to show individuals how to properly use a mortgage as a tool to help create greater wealth through real estate investing. For more information on residential and small commercial loans please call 770-350-7373 or email mgross@dividendamerica.com