2009 will be another year of engaging in short sales for investors. There will continue to be an abundance of opportunities to close a lot of deals and funnel our income into other investments letting our money continue to work hard for us.
The mindset we have going into a short sale is what can we do to help the home owner. First things first is to let them know nothing is guaranteed. We have them sign a letter of understanding detailing what we are trying to accomplish.
Number one is to keep a permanent foreclosure from going on their credit. Second, what is it they need that we can assist them in moving out of the house. Granted the bank does not allow the seller to receive any profits from a short sale, but we may take our own money and pay for their rental truck or first and last month's rent at their new place. We understand they are in a financial crunch, so we are willing to offer some assistance.
We know all short sales do not close, so we keep an existing pipeline of them going. We put together the short sale package getting the Authorization to Release Information form signed by the seller so we can talk to the bank on their behalf and fax it over to the bank. After we fax the package we let it go.
We start to follow up once a week. The first week we find out who has been assigned the file. We get all pertinent contact information in order to keep the channels of communication open. As we continue to follow up we always ask the person with our file if they need anything now or is there something that needs re-faxed.
We never get upset at the person working the file. They are not in control of making the ultimate decision. If we do not hear from our contact for an extended period of time we have ways to get them to call us. Ohhhh how I love those who taught me short sales and how to get the bank contact to call. The little secrets you learn.
Make sure you have your buyer's lined up. Cash buyers first, qualified financed buyers second. Make sure to follow up on all necessary tasks as they rise to ensure a quality closing.
2009 will continue to bring about more short sales with Option Arms and Alt A paper loans resetting. Recasting of the Option Arms will tack on unpaid interest to loans causing more home owners to owe more than what the house is worth.
Happy Short Sales!
Tony
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