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7 Insider Secrets of Foreclosure Investing (Page 1 of 3) |
First, what exactly is a short sale? A short sale is nothing more than getting the lenders to accept less than what is owed instead of having to carry out the foreclosure. Foreclosures are expensive for the banks and can sometimes take a long time. The lenders are open to short sales because by doing so they can avoid the delay and cost associated with carrying out foreclosures.
Anyway, let's get started ?BR/>
INSIDER SECRET #1: “Just order the package already!?BR/>
A common mistake with new and experienced investors alike is to ask the lender IF they will accept a short sale on a property. When you make contact with the short sale department for the first time, all you need to do is order the package. And when you order it you should ask them to FAX it to you. Don't ask them to mail it to you, as you can't afford any delays.
The Short Sale package is one of the most crucial parts of the entire process, and your package should show the lender that YOU mean business.
Now, let's start putting this package together ?BR/>
INSIDER SECRET #2 ?“Information Overload?BR/>
Every short sale pro knows that you should always give the bank more information in the short sale package than they ask for. The more information you give them, the faster the lender will be able to give you an answer. It is a little known fact that when a lender tells you they never received your package that the truth is that they DID receive your package but found it incomplete in some way and just passed on it. These folks get paid on performance and they don’t ave time to waste chasing you for the information they need. Either get it right or don’t send it at all ?that’s the loss mitigator’s attitude.
Even if the lender doesn't ask for these items, the successful foreclosure investor knows to include (among other things):
1. Paycheck stubs, tax returns, and recent bank account statements (if they support your case) 2. A handwritten hardship letter detailing why the homeowner got behind on their mortgage payments 3. A Purchase and Sales agreement with few (or no) contingencies 4. An estimated net sheet, a.k.a. HUD-1 (could this be a shameless plug for EasyHUD.com?)
The estimated net sheet (HUD-1) that you will submit is one of the first things that the lender will pull from the package. They will begin looking for instantly recognizable RED FLAGS. Do you know how to make your HUD-1 "Short Sale ready"? Visit EasyHUD.com to learn how!
Is your Short Sale package ready to go? Well, if you want to maximize your profits it should already be in the lender's hands!
INSIDER SECRET #3 ?“On your mark, get set, GO!?BR/>
As soon as you get your short sale package requirements from the lender, get it completed and back to the lender within 24 hours. Don't forget to include the items we discussed in the Insider's Secret # 2.
Remember that you are working with a very tight timeline and the sooner you get the package in the lender's hands, the sooner they can start reviewing your offer. In some states you may only have 21 days from the time the bank starts the foreclosure until the house is sold at auction!
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