Archive for October, 2007

Are you interested in pre-foreclosures and short sales? This is the 6th in of a series of pre-foreclosure investing articles published in this magazine. Short sales are one of real estates most thrilling acquisition strategies. Short sales are about obtaining properties at good prices by resolving peoples problems. Short sales are multi player win-win transactions. Here are the parties involved in a short sale. Satisfy them all and you will be rewarded!

Home Owner

… and How Much Will a Bank Discount in a Defaulted Loan?

What is a Short Sale?

A short sale is the sale of a property for less than what is owed on it . This happens in over mortgaged properties. These properties are worth less than the total amount of debt that encumbers them. As a result they cant be sold for what it is owed on them. Selling at what is owed on them places these properties above market value. Been above market value makes them un-sellable. In other words nobody will pay for them enough to cover all what is owed on the property. Most properties in pre-foreclosure that can not be saved by the owner are over mortgaged.

The Key to Being Effective in Pre-Foreclosure Investing

To confidently compete in the pre-foreclosure arena, every investor must master the mechanics of foreclosure. The events of foreclosure, the timeframes, the disposition of the proceeds of sale, and the effects of the sale these are all important landmarks in navigating through the foreclosure process. To be effective in pre-foreclosures, the investor must see through the foreclosure process as clearly as through glass. Understanding the mechanics of foreclosure allows the investor to effectively evaluate an opportunity, develop a strategy, provide a solution that satisfies all the parties involved and, as a result, come out with a profit.

Oregon State law chapters ORS 86.705 through 86.770 govern foreclosure procedures in Oregon. This is a must-read for all pre-foreclosure investors. With the understanding of this law and specialized real estate legal counsel, the pre-foreclosure investor will be well-equipped for profiting in this arena.

It is the Key to Developing a Win-Win Transaction

Real estate transactions are not just about properties. They are also about people and life situations. We will call this the story. Every transaction has a story. A clear understanding of the story, with all the characters involved and dynamics of the present situation is the key to crafting a win-win transaction. This is especially true in the realm of pre-foreclosure transactions.

A successful pre-foreclosure transaction is always about extricating a homeowner out of the tight situation they themselves got into. Not only that. In addition, the homeowner needs to feel that he is also a winner despite having to sell the house in distress. In other words, the homeowner needs to perceive that he is better off because of your help. If not, the homeowner will feel taken advantage off. If this happens, things will not work out no matter how good you are at executing the short sales with the bank.

First lets recapitulate last months short sale article. Short sales are a great way to obtain discounted property. Short sales happen when banks allow home owners to sell their properties for less than what they are owed. Short sales are one of the main techniques of pre-foreclosure investment.

We all know that foreclosures are caused by the default on the payment of a mortgage loan monthly installment. Default of monthly installment is primarily caused by debt-over burden. Debt over-burden in turn is caused by a homeowners over commitment to financial responsibilities. In other words, the home owner cant keep up with expenses, develops unsustainable debt and cant pay the mortgage. Understanding the underlying conditions that cause default is a key to effectively negotiate with home owners and initiate short sale transactions.

Help the home seller. Help the creditor. Be rewarded.

Are you looking for discounted property? Then short sales are a great way to obtain a property below retail price.

Everybody knows that the quickest way to succeed in real estate is to obtain properties at a discount for either holding or flipping. Short sales are an excellent way to accomplish this. Because of this, the ability to execute short sales is an essential technique for all investors. When it comes to acquisition of discounted properties, investors capable of executing short sales are definitely at an advantage.