If you are interested in buying a short sale the best way, or stop a foreclosure by Selling with a Short Sale, please visit my website at: www.realestatesolutions2012.com We offer solutions that help the Buyer, Seller, and Real Estate Agent.

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Many real estate investors find that buying foreclosures or REO properties can be challenging.
With foreclosures, the public sale is published and readily known to all interested real estate
investors, but there is limited information and rarely an adequate opportunity to conduct proper
due diligence. Foreclosure properties can be full of surprises!
You often find that the best properties at the foreclosure auction attract the attention of other (often
sophisticated) buyers who are prepared to pay more for the property than you are if they know
they can make a good deal down the road. You also need to have 10 percent of the purchase
price in cash and immediately have to find a loan for the balance within 30 days, whereas with the
short sale you can usually negotiate for a sale closing date that gives you more time to find
financing. A short sale also helps you avoid the complications of a borrower redemption possible
with a judicial foreclosure.
Tracking down the property information for REO properties can be challenging, and the lenders or
their agents may not be cooperative with requests for inspections or details about the condition of
the property. Though the reputation for REOs is that lenders are anxious to sell these properties at
any price, the reality is that they often go for pretty close to the full market value when discounted
for the condition and quick sale terms that they require.
Find properties that are in preforeclosure - that is, properties where the owner is delinquent on her
debt service payments - and make a deal to buy the property from the owner before she loses it
anyway and ruins her credit. These situations became more common with the excessive use of
highly lever- aged financing where borrowers had loans that were equal to (or even greater than)
the full value of the property when it was acquired. Some borrowers took out second loans, and
the combined debt exceeded the value of the property.
If they have a large number of nonperforming loans on their books, they may be motivated to
quickly make a few short-sale deals. However, our experience has been that some lenders with
few delinquent loans are actually more willing to agree to a buyer proposing a short sale because
they want to cut their losses quickly and not risk government intervention or negative public- ity.
Lenders that participate in short sales are always secretive about it too.
One recent legislative change that has really helped owners of properties who want to work out a
short sale is the Mortgage Forgiveness Act of 2007. Previously, mortgage debt that was forgiven
or cancelled by a lender had to be included on the borrower's tax return as taxable income. Under
this new law, any loan that was used to buy, build, or substantially improve the borrower's principal
residence (not second homes or investment properties) qualifies for the exemption from taxation
as ordinary income. A refinance loan for the same purposes also qualifies. The lender is required
to report the debt cancellation to the IRS on Form 1099-C, and the borrower must file Form 982.

2. This law is scheduled to expire as of January 1, 2010, but may be extended. Be sure to seek the
advice of your tax professional before agreeing to any short sale.
You need to send the lender a short sale package with the following information:
A hardship letter or proof from the borrower that he is unable to continue to make mortgage
payments.
Copies of the borrower's income tax returns.
Information on the current condition of the property with contractor estimates or proposals to make
any needed repairs property.
The estimated value of the property and your offer for the property.
The lender will want to verify current market conditions where the loan balance is greater than the
current value of the property. They'll obtain a Broker's Price Opinion (BPO) or quick appraisal of
the property. This figure acts as the basis for their negotiations with you, with the goal of achieving
as close as possible to the BPO.
The one common denominator to short sales with all lenders is that short sales require a lot of
phone calls and investigative legwork to even find out whether the lender is open to receiving an
offer for less than the current loan balance. Each lender has a different organizational structure for
various individuals or departments that handle non-performing loans. Some lenders have
automated phone systems that can be helpful and allow you to get right through to people you
need; others are best described as "voice mail jail." Live operators are probably already familiar
with what you're looking for, and you just need to describe that the purpose of your call is to find
some- one in charge of loss mitigation or foreclosures. If all else fails, you should contact the
customer service department and ask to speak to someone who is authorized to make sales on
preforeclosure properties. Have the property address and the borrower name and loan number (if
available).
These transactions aren't likely, and are a sure bet to take at least 30 to 90 days (or even more)
because most lenders are now much more inclined to work with the current borrower if at all
possible. Our advice is that short sales can be effective in limited circumstances and only if you
have the ability to reach a decision-maker at a lender that is inclined to participate. The real estate
inves- tor looking for just one property may find that the effort exceeds the return and that there
are better ways to locate and purchase rental properties.
Don't forget that with short sales, you need to have some cash as well as be preapproved for
loans so that you can make deals quickly. Lenders that are willing to agree to short sales are
going to require all cash and won't be willing to offer any sort of financing. Lenders that are likely
to be sources of funds for your loan on a short sale are going to be selective about making loans
on non-owner-occupied rental properties. Your credit worthiness and having an established
banking relationship is helpful if you're going to be successful with buying short sales.
See How I Find Short Sale Properties...

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