Short Sale Riches - An Example Provided
I have done many short sale in the past 15 years and have faced rejection from lenders and homeowners 20-30% of the time. Does rejection bother me? Not in the least and I love it, since It provides more information so that I can improve my negotiation skills As with any sales tactic, I am playing a numbers game and there is no game better than the short sale game which can make you wealthy beyond your dreams.
Most agents, investors or even lenders do not know how a short sale works or how to negotiate a short sale successfully There are no seminars, Gurus or get rich quick schemes in the short sale industry and do not let anyone fool you. Short sale transactions are learned with experience and there in no one way of doing it. Each short transaction is a separate animal on its own with separate investors and numbers. There are very few investors who truly know how to successfully negotiate a short sale. Most investors have the perception that all that is necessary is to submit an offer and wait for the bank to give you an answer. If all goes well the offer will be accepted but in many cases it's not that simple. That's why a strategic plan is necessary before you even begin a short sale. You must set up a plan to persuading the lender to agree with your offer.
There are 2 key steps that will ensure success when negotiating a short sale with lenders:
1st. Evaluate all the numbers that the owner give you, such as the total amount of the 1st, 2nd or even 3rd trust deeds and determine if you indeed have a short sale opportunity on your hands. Obviously, if the total balance of all liens is greater that the "as is market value" of the property than you may have a candidate. The next step would be to qualify the homeowner to determine if they are truly in financial hardship and most homeowners are, especially if they are behind on their payments.. Many rookie investors are under the misconception that every homeowner facing foreclosure is a good short sale candidate. Not all deals are good short sale opportunities. You must know the difference between a good and a bad deal.
2nd Don't take no for an answer. If the lender says no you must ask yourself why? Lenders do not make decisions based on emotion, unlike most homeowners, their only concern is to negotiate and get the highest price on their investment and trust me, they will say no to offers dozens of times. When the end approaches and the property is scheduled to sale at auction, they may very well say yes to your offer. I personally expect to get a no on my first offer and second counteroffer before we get down to the real serious numbers in purchasing any given property.
Here is an deal which I recently purchased that I would like to share with you, the property was located in Los Angeles:
I got a call from an owner in distress on one of my advertisements. This owner was behind 3 months and a notice of default had already been filed. He had a 1st loan amount of $585,000 and 2nd loan amount of $95,000 the property was worth $620,000 in it's as is condition. I immediately had him sign an "authorization to release" and contacted the 1st lender within 2 days and asked them to send a short sale package, which they did. Long story short, my initial offer for the 1st and 2nd combined since one lender held both was $480,000. They send out their broker for a BPO or "brokers price opinion" which came in at $600,000 they countered me $580,000 back and forth some more and the final purchase price was negotiated to $495,000. I sold the property within 30 days for $605,000 netting $580,000 after commissions and closing costs. Net profit from this one deal was $70,000. Not bad for 3 months work.
This would have never happened if I accepted no from the bank. I must have received a "no" several times from the loss mitigator but I knew that if I was persistent and aggressively polite they would reconsider. Remember, the next time you are putting together a short sale offer, be prepared and take control of the deal. Never take NO for an answer. Be proactive not reactive. Don't just submit offers without having a game plan. Do yourself a favor and take advantage of the opportunity to make lots of money in an industry where great deals are hard to come by.
More info at http://www.RealEstateInvestorsLife.com Rick Sarouk is an active nationwide real estate investor and certified appraiser. He has been investing in foreclosure and preforeclosure real estate for the past 18 years.
Article Source: http://EzineArticles.com/
I have done many short sale in the past 15 years and have faced rejection from lenders and homeowners 20-30% of the time. Does rejection bother me? Not in the least and I love it, since It provides more information so that I can improve my negotiation skills As with any sales tactic, I am playing a numbers game and there is no game better than the short sale game which can make you wealthy beyond your dreams.
Most agents, investors or even lenders do not know how a short sale works or how to negotiate a short sale successfully There are no seminars, Gurus or get rich quick schemes in the short sale industry and do not let anyone fool you. Short sale transactions are learned with experience and there in no one way of doing it. Each short transaction is a separate animal on its own with separate investors and numbers. There are very few investors who truly know how to successfully negotiate a short sale. Most investors have the perception that all that is necessary is to submit an offer and wait for the bank to give you an answer. If all goes well the offer will be accepted but in many cases it's not that simple. That's why a strategic plan is necessary before you even begin a short sale. You must set up a plan to persuading the lender to agree with your offer.
There are 2 key steps that will ensure success when negotiating a short sale with lenders:
1st. Evaluate all the numbers that the owner give you, such as the total amount of the 1st, 2nd or even 3rd trust deeds and determine if you indeed have a short sale opportunity on your hands. Obviously, if the total balance of all liens is greater that the "as is market value" of the property than you may have a candidate. The next step would be to qualify the homeowner to determine if they are truly in financial hardship and most homeowners are, especially if they are behind on their payments.. Many rookie investors are under the misconception that every homeowner facing foreclosure is a good short sale candidate. Not all deals are good short sale opportunities. You must know the difference between a good and a bad deal.
2nd Don't take no for an answer. If the lender says no you must ask yourself why? Lenders do not make decisions based on emotion, unlike most homeowners, their only concern is to negotiate and get the highest price on their investment and trust me, they will say no to offers dozens of times. When the end approaches and the property is scheduled to sale at auction, they may very well say yes to your offer. I personally expect to get a no on my first offer and second counteroffer before we get down to the real serious numbers in purchasing any given property.
Here is an deal which I recently purchased that I would like to share with you, the property was located in Los Angeles:
I got a call from an owner in distress on one of my advertisements. This owner was behind 3 months and a notice of default had already been filed. He had a 1st loan amount of $585,000 and 2nd loan amount of $95,000 the property was worth $620,000 in it's as is condition. I immediately had him sign an "authorization to release" and contacted the 1st lender within 2 days and asked them to send a short sale package, which they did. Long story short, my initial offer for the 1st and 2nd combined since one lender held both was $480,000. They send out their broker for a BPO or "brokers price opinion" which came in at $600,000 they countered me $580,000 back and forth some more and the final purchase price was negotiated to $495,000. I sold the property within 30 days for $605,000 netting $580,000 after commissions and closing costs. Net profit from this one deal was $70,000. Not bad for 3 months work.
This would have never happened if I accepted no from the bank. I must have received a "no" several times from the loss mitigator but I knew that if I was persistent and aggressively polite they would reconsider. Remember, the next time you are putting together a short sale offer, be prepared and take control of the deal. Never take NO for an answer. Be proactive not reactive. Don't just submit offers without having a game plan. Do yourself a favor and take advantage of the opportunity to make lots of money in an industry where great deals are hard to come by.
More info at http://www.RealEstateInvestorsLife.com Rick Sarouk is an active nationwide real estate investor and certified appraiser. He has been investing in foreclosure and preforeclosure real estate for the past 18 years.
Article Source: http://EzineArticles.com/
Labels: back office, chat support, data entry, email support, IT outsourcing, outsource, outsourcing, web support
posted by Sharad Saxena @ 11:37 PM
0 Comments:
Post a Comment
<< Home