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How to Negotiate a Successful Short Sale
Anyone who has ever profited from doing a short sale has also without a doubt had one or two rejected at some point. Guess what? It is just the nature of the beast?As with all types of sales; you're playing a numbers game. There are very few investors who truly know how to successfully negotiate a Short Sale. We find that most investors have the perception that all that is necessary is to submit an offer and wait for the bank to give you an answer. If all goes well the offer will be accepted but in many cases it's not that simple. That's why a strategic plan is necessary. "What do you mean?" You ask. A strategic plan means making the deal go your way by persuading the lender to agree with your offer. There are several steps that will ensure your success when negotiating with lenders. First of all, you must be able to determine if you indeed have a short sale opportunity on your hands. Many investors are under the misconception that every homeowner facing foreclosure is a good short sale candidate. This could not be any further from the truth. One of the most common mistakes made by investors is attempting to fit a square peg into a round hole. Not all deals are good short sale opportunities. You must know the difference between a good and a bad deal. Period! You'll have to analyze the deal and develop an excellent plan of attack if you want to truly master the art of the Short Sale. Second, you must not take no for an answer. No can never be the final chapter to your negotiation. If the lender says no you must ask yourself why. There must be a reason. Why did they say no? Is there anyone else I can speak with? Was my offer to low? How does the lender determine their bottom dollar? What else can I do? What was the BPO amount? These are just a few of the questions that need to be addressed each time you are met with some resistance from the lender. We'd like to share an awesome deal that one of our students closed recently. His name is Thomas Stockman. Thomas got a call off of one of his signs from a gentleman that had two properties in foreclosure. The two properties were on the same street and were bought as rental homes within the last year. Consequently, they were also financed by the same mortgage company. One property had a mortgage balance of approximately $150,000 and was in need of several thousand dollars worth of repairs. The other had a mortgage balance of $156,000 and was currently being rented for $1,100 per month. Both properties had very little equity but the neighborhood had been very active over the last 9 months. After qualifying the two potential deals he decided to attempt short sales. He contacted the bank and began the process. His offer on the first house was $89,900 and $95,800 on the second house. The bank rejected both and asked for higher offers. After several conversations and some additional documentation to justify his offer, Thomas was able to get both properties for a total of $60,000 below market value. Thomas rehabbed the first property for $3,500 and put it on the market for sale. Since the second property was already occupied by a tenant he decided to keep it. His mortgage is roughly $400 per month (interest only loan/taxes paid at year end) he makes $700 in monthly positive cash flow. Not bad for a beginner (wink). This would have never happened if Thomas accepted NO from the bank. If he would have not known what pressure points to touch and how to counter without increasing the offer amount we would not be talking about these deals. This type of outcome is customary when you are equipped with the necessary tools and know how to turn a "No" into a "Yes" just by slightly adjusting your approach. Thomas got two great properties with lots of equity and a constant cash flow, the homeowner avoided TWO foreclosures, and the bank was satisfied. Remember, the next time you are putting together a short sale offer, be prepared and take control of the deal. Never take NO for an answer. Be proactive not reactive. Don't just submit offers without having a game plan. Do yourself a favor and take advantage of the opportunity to make lots of money in an industry where great deals are hard to come by. We hope that you have learned something and are on your way to much success. Best Regards, D.C. Fowler, Real Estate Investor/Educator Mr. Fowler has been a real estate investor for over 15 years specializing in the area of pre-foreclosure/short sale investing. He has bought and sold over 200 homes in Georgia, Florida, Louisiana, and Tennessee using the same short sale techniques that he teaches in his course, Making Money with Short Sales: The Complete Guide to Acquiring Property Pre-Foreclosure. Mr. Fowler currently resides in Atlanta Georgia. He also spends many hours per month teaching his creative real estate investing techniques to other aspiring investors across the country.
MORE RESOURCES: Altadena’s rough real estate market: Slower sales, lower prices, lottery winner plucking up properties Los Angeles Times Real estate magazine reports Les Wexner as Blue Heron buyer The Martha's Vineyard Times Real estate expert warns socialist mayoral candidate could trigger massive NYC exodus - Fox Business Canadian psychologist Jordan Peterson sets up shop in the Valley, records show The Business Journals Bedrock flexes its real estate portfolio to grow Detroit's tech ecosystem - Crain's Detroit Business Bedrock flexes its real estate portfolio to grow Detroit's tech ecosystem Crain's Detroit Business ‘Taken advantage of’: Real estate agent ripped off friends, church, and federal government - WSOC TV Experts predicted Minnesota real estate agents would quit, 5 INVESTIGATES found a different reality 5 EYEWITNESS NEWS Office real estate wide open in Denver as vacancy rate hits 36 percent Colorado Public Radio 5 Essential Tech Tools for Real Estate Agents National Association of REALTORS® Vail Valley real estate inventory is on the rise VailDaily.com Real Estate Partners Dollar Tree Let's Talk Business: June residential real estate sales lagging, heritage grants and more Pueblo Chieftain A New Perspective: Here Comes the Groom | Real Estate Insights Piedmont Exedra Dawson County weekly real estate transactions, July 18 Central Nebraska Today State lawmaker joins Westport commercial real estate brokerage as vice president Hartford Business Journal Boston Real Estate Times Unveils 2025 Excellence Award Winners: Honoring the Visionaries Shaping New England’s Future Boston Real Estate Times Private Credit Surges in 2025 as Real Estate Developers Bypass Banks The World Property Journal Real estate news: Senior apartments in Tustin sell for $83M; Fullerton Metrocenter snares $118M Orange County Register NAR Real Estate Forecast Summit National Association of REALTORS® New York Housing Market Trends 2025: Is the Tide Turning for Buyers? Norada Real Estate Investments Today’s Mortgage Rates: The States Offering Lowest Rates – July 18, 2025 Norada Real Estate Investments Los Angeles Water & Power commits $100 to real estate debt Pensions & Investments Property management with an owner’s mindset J.P. Morgan Real Estate Market Report (June) highlandscurrent.org Corcoran McEnearney Announces Evan Lacopo to Lead the Number One Real Estate Office in Alexandria, Virginia Alexandria Living Magazine Licking County real estate transfers for June 30-July 4 range from $200,000-$14.6 million The Newark Advocate SRS Real Estate Partners Arranges $4.53 Million Ground Lease Sale of Walmart Property in Deltona, FL citybiz Banner Real Estate Group Breaks Ground on 334-Unit The Faywell Multifamily Development in The Heart MultifamilyBiz Bridgemarq Real Estate Services® Declares Dividend Yahoo Finance Moon Becomes Next Real Estate Frontier, NAR Reports Higher Foreign Investment In US Huntsville Business Journal Gravelle advises on current real estate market in Grant County Columbia Basin Herald CBRE Announces Strategic Leadership Appointments Across U.S. & Canada Advisory Business Boston Real Estate Times Mapletree Sells Sun Belt Warehouse Portfolio to EQT Real Estate for $241M Commercial Observer Operation Pawssible: Greenbrier Humane Society gets a boost from local real estate company Mountain Messenger GenesisM Breaks Ground on 154,000-Square-Foot Biomanufacturing Facility in Bedford, MA Boston Real Estate Times Frederick Ford, real estate executive and first Black Union League Club president, dies at 98 Chicago Tribune AGC MA Announces 5th Annual Building Advancement Externship to Bridge Educators with STEM Construction Careers Boston Real Estate Times What's the most expensive property sold in Rhode Island? July 18 real estate transactions The Providence Journal The Pipeline: Commercial real estate roundup for 7.18.25 Richmond BizSense Home Buyers: Stop Freaking Out After the Home Inspection National Association of REALTORS® LOCAL REAL ESTATE TODAY 7.18.25 KQEN News Radio Tips on spotting real estate investment opportunities and avoiding risks, from experts at GR Property Group Community Impact Home Buyers May Have Accepted a New Norm on Rates National Association of REALTORS® July Economist Snapshot: What Will the Big Beautiful Bill Mean for Commercial Real Estate and Housing? Urban Land Magazine SRS Real Estate Negotiates $4.5 Million Sale of Walmart-Anchored Property in Metro Orlando Shopping Center Business Top Stocks for Real Estate Investment Elite AI Stock Forecasts - Massive wealth growth Jammu Links News Miami-Dade’s self-storage surge a boom for real estate IslanderNews.com Hunt Companies Acquires Controlling Interest in Carter, Strengthening Real Estate Development Platform Business Wire Stage Point Europe Launches Its RWA Token $SPET, Setting it up as a Bridge Between Crypto and Real Estate Morningstar Vend Leans Into Verticalisation As Real Estate Revenue Grows 11% In Q2 onlinemarketplaces.com New plans unveiled for Water Street’s second phase Tampa Bay Times Is Apollo Commercial Real Estate Finance Inc. a good long term investment - Explosive market performance Jammu Links News Real Estate Transfers ~ June 25, 2025 The Bedford Citizen Drake Real Estate Partners closes largest fund yet after pivoting to institutions Private Equity Real Estate | PERE Cary Grant’s widow has listed the estate they shared for $77.5M — featuring a complete overhaul New York Post Real estate sales in Jefferson, Bullitt and Oldham counties for Jan. 2-5, 2025 - The Courier-Journal Real estate sales in Jefferson, Bullitt and Oldham counties for Jan. 2-5, 2025 The Courier-Journal Wood County Recorder reports on second quarter real estate activity BG Independent News CCI Real Estate Obtains $67M in Construction Financing for Mixed-Use Community at University of Georgia REBusinessOnline Real estate transfers: Lake Township condominium complex sells for $5.61 million - Canton Repository Manitowoc's real estate transfers include a sale of nearly $1 million to Riverside Dairy Herald Times Reporter |
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