New investors often worry that there will be too much competition for short-sale foreclosures, but we are here to tell you that there will always be distressed home-owners, for whatever reason, who need your help! There are millions of foreclosures each year in the United States. There is also an equal number of divorces, bankruptcies, probate situations, layoffs, reloca¬tions, and illnesses. The list is endless. We try to buy directly from the distressed homeowners when possible, because it saves them from a final foreclosure on their credit report: however, don’t overlook the hundreds of thousands of bank-owned properties. The banks are inundated with foreclosures and will be for years to come.

The Biggest Mistake New Investors Make Is Offering Too Much

If your offer does not embarrass you, it is too high! You can always go up … rarely down. Do not be afraid to make low offers. The worst that can happen to you is that the bank will say no, and then you will make a higher offer. A rejection is not the end of the world, so offer low. We can’t stress enough how vital this is to your success. We want to make a point here.

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.

What Is a Short-Sale?

Everywhere you turn, there is another seminar, another guru, or another boot camp, all teaching different ways to do short-sales. Can so many people be right? How many different ways can there be to do the same tiling? There are not 100 different ways to do short-sales; there is one way, and everyone is trying to put a spin on it to seem original.