Real Estate Short Sales 101: Know Your Three R's!

Short sales are a great way to make money. You can buy real estate before foreclosure auctions and get deep discounts. But, before you make a purchase, do your research. Since 2000, I have concentrated almost exclusively Sedona Az Homes For Sale on short sales. I have been an investor in real estate for more than twenty years. These houses can make you money, and I can attest that it is possible to do so. There is still much work to do before the deal is finalized. No one can deny that you need to know the basics in order to be successful in any business. Short sales is no different. It has its own version, with the three R's of Reach out, Research and Be Ready to Negotiate. Short sales can be triggered when homeowners fall behind on their payments by three months. The bank can take back the house and ruin credit, and the homeowner may face foreclosure. The bank holding the mortgage is also losing money. They are spending additional resources on lawyers and court costs. This is where you, the investor, come in. Reach out to the homeowner first. You can contact the seller to discuss the possibility of a short sale. If he's tried other options, such as listing the house with a realtor, or FSBO (For sale by owner), and it didn’t sell, he may be open to participating in a short sale. He will be happy to participate in such a deal, especially when he realizes that there is almost never any cash out of his pockets. You not only make an intelligent investment for yourself but you also offer a solution for someone else's problem that may seem impossible. After obtaining permission from the homeowner, negotiate with the bank for a lower mortgage amount than what is actually owed. Then you consider the payment complete. This is where the second R, research, comes in.