short sale affiliate
If you have dealt with short sales in the past you have undoubtedly had some offers rejected along with some that have been profitable. You should know short sales are very much like the old adage “if you throw enough stuff against the wall something is bound to stick.”
Remember what a short sale is. “A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed.”
Many investors feel if they submit a short sale offer to the lender holding the mortgage, the banks will be so desperate they will jump at the deal. If the bank doesn’t jump at the offer the average investor may just move on to the next deal.
The successful investor needs a plan to buy short sale properties and needs to stick to that plan. The plan is to convince the bank that your offer is realistic and good for the bank.
You may not realize it but you must negotiate with the lender. You must negotiate following proven steps.
First you must be able to determine if you actually have a short sale opportunity on your hands. Many investors believe that every homeowner facing foreclosure is a good short sale candidate. This is a misconception.
Some sellers who decide that their home won’t sell at the price they had imagined often start to wonder if they should do a short sale. A short sale doesn’t always solve problems, but it could actually cause more problems for the home owner. Short sales are not the answer to every home owners problems. Analyze the deal and make sure it good for the homeowner, you and the bank.
Secondly, you must be strong enough not to take no for answer. If they say no you ask why? Was my offer too low? Didn’t I explain it well enough? Are my numbers correct? May I speak your superior?
Short Sale Consequences to the buyer:
A short sale is dependent on a buyer making an offer to purchase. If you do not receive an offer, you will not qualify for a sale. So even if you meet all the other criteria, it is possible that no one will buy the short sale.
Tax Consequences:
If the lender agrees to the short sale, the lender has the right to issue the homeowner a 1099 for the shorted difference, due to a provision in the IRS code about debt forgiveness. Some situations are exempt from debt forgiveness according to the Mortgage Forgiveness Debt Relief Act of 2007.
Always remember that for a deal to be win-win-win, the seller has to get out from under a debt without any resulting tax consequences. The lender must feel that they are getting the most money possible and you want to pocket a decent profit.
It is possible and is done everyday. There are thousands of properties. Find one, follow a plan and you will be successful.
Ray Caran has owned and operated a multitude of businesses over the years. He has been buying and selling property for over 20 years. Read money making articles at: Property Money Making Secrets [http://www.property-moneymakers.com]
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BOONTYCOON~P2 of 3~Overview, Private Funding & Short Sale Insight