How Much Do You Offer the Bank?

It is important to realize that when submitting a short-sale package, you are building a case. The better the case, the deeper your discount. Think of yourself as an attorney preparing for a court hearing. If the attorney shows up unprepared, the case will be lost.

How many of you remember the O. J. Simpson trial? If you think he was guilty, why do you think he walked away from a double murder charge? His attorneys built a great case, and it was presented more effectively than the prosecution’s case was. Short-sales are the same concept: the better the case, the better the deal.

In a nutshell, a short-sale is negotiating with a mortgage holder to accept less than what is owed as payment in full.

A short-sale is the favorite investing strategy when we find a distressed homeowner who owes the bank close to or more than what the property is worth.

Here’s how it works: The homeowners owe $200,000 to their first mortgage holder and the payments are in arrears. Their property is worth $200,000 in retail condition. With the proper negotiating strategies, you get the bank to accept $100,000 as payment in full. Therefore, you are purchasing a $200,000 retail property for 50 percent of its value.