Real Estate Short Sale Overview

Short sales are when a seller is behind in payments and instead of going through with a foreclosure, the lender accepts a lesser amount for the home. This allows the seller to avoid a completed foreclosure, the bank to cut their losses quickly, and the investor to buy a property for less than retail.


Pros of Real Estate Short Sale:

• Create instant equity by discounting debt lender
• Rise in foreclosure rates across the country make this an expanding market
• More complicated process discourages many investors from entering
• Excellent ability to create a systemized process
• Very low risk
• Strong credit score or huge amounts of cash not needed
• Lots of education and resources available

Cons of Real Estate Short Sale:

• Flood of investors and gurus entering this market
• High organization skills and patience required
• Long time (2-10 months) between start and finish of each deal
• Dealing with the banks and their loss mitigators can be painful
• Changes with bank procedures can directly affect your business

Marketing Advice of Real Estate Short Sale:

• A Lis Pendens list is the list when the lender starts the foreclosure process and first becomes public. It is the most targeted list, but also the most competitive. Find out what others are using by asking a seller in default to hold on to all marketing material, analyze it, and make yours better.
• Bandit signs pull well, but you will get lots of calls from people who don't qualify, and probably a police officer or random upset neighbor now and then.
• Use sequential mailings for your direct mail marketing. Hit 'em up multiple times in an automated fashion.
• Door knocking can be effective but very time intensive.