Short Sales 101

Here are the basics steps to follow for a successful short sale:

Try to find a Realtor experienced in short sales. There isn't a basic training course for short sales so look for someone with experience.

1. Most banks are requiring your property be listed for at least 60 to 90 days before they will consider a short sale. It is important that the property goes on the MLS as quickly as possible.

2. Send your bank(s) a signed authorization allowing your Realtor to speak with them regarding your account.

3. It is vital to help your Realtor get a contract on your property. The short sale can not proceed without it.

4. Get a contract.

5. Submit the contract to your bank to you can begin negotiations.

6. Have your lender's short sale package sent to you. This is a list of items they want and paperwork they want completed (pay check stubs, financial info, hardship letter, etc.). This is the time to open about your financial situation. You are, after all, trying to convince a banker to take less money for your property than you currently owe.

7. Review this information with your Realtor and send it in to the lender - if any information is missing make sure you explain why in writing. The package needs to be as complete as possible. A hand written note briefly stating your poor current financial condition is a addition to the package.

8. Call your lender and make sure you know where to send the package; you will want a fax number or address for the Loss Mitigation or Short Sale Department. A note of caution, often banks use different names for departments handling this type of problem. Loss Mitigation is generally used but not always.

9. If you need to fax, do so and call to confirm receipt. If you need to mail make sure you send via overnight mail and track the package and have someone sign for the package.

10. Call your lender to find out who the loss mitigation representative is for your file.

11 If the submitted package is complete the lender will order a Brokers Price Opinion (BPO). This is the key that will unlock the process and allow it to go forward. If that opinion is too high the lender will not accept a low offer. Your Realtor must meet with the agent doing the BPO and offer supporting information why the low offer should be accepted for the amount indicated. Lenders will frequently accept an offer 10% lower than the BPO

12. Call about once a week to check on the file unless they give you a specific date to call.

13. The BPO will determine what value the bank will give your property, at that point they will either accept or deny your short sale.

14. If the short sale is accepted, a date for a closing is arranged and you will go to a title company and close the property at which point ownership transfers.

This is as simple as we could make this list while still including everything that is required for a short sale.

There are many things that have to happen correctly in order for a short sale to be accepted. Follow our advice and find a Realtor experienced with this process.

Ray Caran has owned and operated a multitude of businesses over the years. He has been selling over the Internet since 1997.

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Ray Caran has owned and operated a multitude of businesses over the years. He has been selling over the Internet since 1997. For more real estate tips go to: Property Money Making Secrets.

To subscribe to his free opt-in email go to: Property Money Making Secrets and you will never miss an exciting issue.

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Investing in Foreclosures - Pros and Cons

Investing in foreclosures is no doubt one of the best opportunities to make money in today's economy. As with any type of business venture, there are risks involved. Investing in foreclosed properties offers great opportunity to buy homes significantly under market, but there are some risks such as considerable research, under lying lien problems, long-term carrying costs and several others. If you are willing to take the chance on a property or two you may prosper in the end.

Foreclosed homes can be purchased at several stages. First is the pre-foreclosure phase, then the auction phase and finally the REO phase each of these presents their own set of pros and cons. Familiarize yourself with each of these different types of foreclosures, weigh the pros and cons for each, you may be able to avoid a costly mistakes and headaches through the process of investing in home foreclosures.

Take a look at the possible pros and cons at the various stages of a foreclosure:

Pre-Foreclosure Phase

This is the stage where the homeowner is still in control of the property. Although the loan is in default and the pressure from the lenders is just beginning. The homeowner is usually in a position to sell the property quickly and avoid the foreclosure process all together. This means hue savings and large potential profits for you.

Pros

20-40% discounts on the estimate value
Low or no down payment, due to the built in equity
Research and inspection opportunities
Sales agreements that are flexible

Cons

Home owner may not be reachable
Fierce competition, many investors are trying to buy these type foreclosures
Time to research documents and court filings
Undisclosed or underlying liens against the property

Auction Phase

Possibly the most profitable stage of a foreclosure. Auctioned properties usually offer the best potential profit when buying foreclosures. An auctioned property is sold during a public auction to the highest bidder. If you have done you, research these types of properties are sometimes sold way under market value.

Pros

Greater discounts can be as high as 35-50%
Great ROI, return on investment
Greater potential profit

Cons

Property inspection is generally not available
Postponed auctions mean valuable time lost and research wasted
Large down payments that must be paid at the time of auction
Incomplete research can cost you a lot of money
You may not win the auction at all

REO Phase

An REO occurs when the lender retains the property after the auction phase. If the bids are not high, enough during the auto the lender will bid on the property to seize control and resell it themselves. In most case, the property has no value to the lender until the house sells; in this case, the lender is usually motivated to sell the property fast.

Pros

Discounts of 5-18%
Clear title, free of all liens
Back taxes are up to date
Lenders may do the repairs, or offer additional discounts

Cons

Low ROI, return on investment
Research must be very through
Potential for loss in the end

When investing in real estate, especially in foreclosures there is great risk involved. While the potential to make a substantial profit in foreclosures you need to make sure that, you do your research and fully understand what your risks are. Properties that offer the greatest profit potential are often times the risky investments.

Thomas Bladecki is the author and can provide additional information about foreclosure listings, current real estate news and conditions on the most popular cities, visit Home Foreclosure Help to get the latest news and information about the foreclosure dilemma.

Read valuable information in his Foreclosure Blog. It is updated regularly, and is a great portal to find the latest scope in the foreclosure world.

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5 Reasons To Invest In Real Estate TODAY!

By: Brenda Cote

When it comes to real estate, the topic of the day is the downturn in the market, the number of people losing their homes, and how much this is going to hurt the economy. In the seventeen years I have been in the real estate business, I have witnessed every fluctuation the market has to offer. While it is true that many property owners are enduring trying times, rarely does the same happen to knowledgeable real estate investors.

There are those individuals who remain emotionally unattached and invest wisely in real estate. As a result, they live a very comfortable, if not lavish, lifestyle. Investing in real estate, especially during a downturn, can widen an investor's opportunities and bring about lucrative returns. This is a truth. If you are thinking about becoming a real estate investor or have already made the decision to start, the following information is priceless.

Wanting to secure a comfortable financial future, most of us go to work every day hoping to build a nest egg. Since, it is common knowledge that real estate investors have the capacity to not only build a nest egg but also create a fortune, why aren't more people joining the ranks of real estate multimillionaires? Why aren't there more people fighting for a seat on the real estate bandwagon?

Well, the truth behind real estate investing is that it is a business and therefore, must be treated like one for it to prosper. Just like any other promising venture, investing in real estate requires a well-defined vision, a strategic plan, and an entrepreneurial mindset. Even with the overwhelming evidence revealing success, only a microscopic segment of the population is willing to take the risk, do the work and follow through. The rest simply watch and call those of us doing the work "Lucky".

When I began my career in real estate, I didn't have a plan. I didn't invest. I didn't even see past my next commission check. What kept me hanging on was a desire to live like the people I worked for, most of whom were real estate investors. Years later, I committed to create serious wealth through real estate. As soon as I mindfully committed to my goal, I began to make deals and more money than ever before.

By choice, I am not one of those investors who vacations six months out of the year. I work all the time meeting with clients, looking at properties and refining my strategy. Add to that a growing number of mentoring/coaching clients and my schedule is officially full. Nevertheless, I am continuously increasing my net worth as I am doing something that never feels like work.

Besides creating amazing wealth, being your own boss and having a place or two to call home, owning a real estate investing business has many other advantages. The following five play a special role for the novice investor.

1. Safe Investment

When we use a timeline to compare the real estate market to other investments, such as the stock market, it is easy to see that real estate continues to increase in value over time without any serious instability. Although, there is currently a housing crisis in various parts across the country, every indicator points out that what we are actually experiencing is a readjustment of highly inflated real estate prices. Just as prices may be dropping, in time they will undoubtedly increase. In contrast, the stock market has put investors through a dizzying rollercoaster ride made up of swift highs and abrupt lows throughout history. Regardless of what type of market we are in, it is clear that an investment in real estate guarantees a profit over time.

2. No Cash Necessary

For beginning real estate investors, sometimes the only investment they can make is their time. For every real estate investor, finding a lucrative deal is as good as striking oil. There are plenty of seasoned investors with money in their pockets itching to buy a piece of discounted property. Wholesalers often utilize this method. Therefore, if you are new to the game, consider finding a deal, tying it up and connecting with an investor who can take it off your hands...for a price, of course.

3. Almost Anyone Can Do It

Real estate is such a lucrative field that it opens doors to countless amateur investors everyday. There are how-to books and seminars at every turn teaching would-be investors a myriad of ways to make huge profits in the real estate market. While it is true that overnight success is practically unheard of, anybody with the heart, mind and determination can make it big in real estate. The keys are to continue learning and to monitor market conditions.

4. Leveraging Power

While novice investors can turn a quick profit by wholesaling their deals, Buy-and-Hold investors can yield a profit by borrowing against (leveraging) their properties. Typically, lenders will allow holders of owner-occupied property to borrow up to ninety-five percent of their property's value and up to eighty-percent of non-owner occupied units. This means that you can either purchase property with a minimal out-of-pocket investment or acquire financing that will allow you to pull cash out of your property's equity to use for future ventures.

5. Tax Breaks

The popular 1031 exchange and depreciation are just two of them. The United States government has set up multiple tax breaks favoring real estate investors. Owning real estate with the goal of making a profit allows you to deduct interest payments, repairs, and vacancies among other expenses when preparing your tax return. It is important to note that purchasing real estate makes economic sense; it should not be purchased solely for the tax benefits.

Ultimately, owning a real estate business is the way to achieve financial freedom regardless of economic conditions. Whether you quit your job and dive right in or you work at it in your spare time, you can make it happen. Worthwhile benefits are waiting faithfully for the taking.

Article Source: http://www.articleviral.com

It's A Real Estate Boom for First Time Home Buyers

By: Roy Landers

The subprime mortgage real estate fiasco has created a glut of residential real estate in the real estate market. Foreclosures are on the rise and it doesn't look like the end is in sight for at least another year. Thousands of home owners are losing their homes because adjustable mortgage rates have adjusted upward and caused increases of monthly mortgage payments so high that the affected home owners just can't make the payments. It is inevitable, under these circumstances that many homes go into foreclosure and banks have to take them back.

While it is unfortunate that many home owners are losing their homes, the opposite and upside effect is that the real estate market is now a boom for the first time home buyer.

Mortgage interest rates are still low and banks and real estate lending institutions have 30-40 year fixed loans for home buyers. With home values in many areas around the country, such as California, plummeting anywhere from 30-50 percent of what they were a year ago, the market is wide open for buyers who have never owed a home and would like to do so now.

Lending institutions and sellers are very motivated now and are readily lending their ears to home buyers saying "lets make a deal" and deal they will. Here are some of the innovative and sensible ways home buyers can now acquire a home of their own when they are armed with some real estate homebuyer education.

1. Use government grants and loans for down payment assistance.

The federal government in 2003 established the American Dream Down Payment Act. This federal law has allocated $200 Million a year since 2003 to assist with arranging down payments for first time home buyers. This is a good indication of just how serious the government is about helping Americans make the American dream of home ownership come true.

Fannie Mae, one of the many federally supported programs for home buyers has programs such as the MyCommunity Fixed Rate Mortgage. This unique program is ideally suited for the first time home buyer. It provides for low down payment, high loan to value with broad flexibility, including nontraditional credit considerations allowing for the buyer to qualify for the loan. It also has special financial options to serve public servant professions such as teachers, police officers, firefighters and health care workers, and people with disabilities.100% financing is available with 30-40 year fixed rates. Check out the details at http://www.efannie.com.

These funds, in addition to other government funding sources, are made available through federal, state and local government agencies that provide down payment assistance to their citizens on a case by case basis.

Every major city and county has one of these programs. One need only exercise a little initiative and these funds can be acquired. Contact your local housing authority, city managers office or county administration department to find out about them and how to apply.

2. Use non-profit agency down payment assistance

Another little known, but long existing opportunity for first time home buyers to acquire help with down payment assistance is the numerous numbers of non-profit agencies around the country that provide free down payment assistance to home buyers. The Community Reinvestment Act of 1977, enacted by Congress in 1977 and revised in 1995, requires banks located within identified communities to make loans and reinvest the depositors' deposits within that community.

For decades now and continuing into the future banks have been making huge amounts of funds available to invest in targeted communities. However, the availability of the funds was not publicized in a significant way and many people did not and still do not know about these funds. Many non-profit agencies became aware that they could help in the community revitalization effort by creating a means whereby the banks could channel the funds through various home assistance programs that non-profits created. The non-profits that specialize in this type of program have grown over the years. Some are very large and are nation wide such as the Nehemiah Corporation - www.nehemiahcorp.org.

They get funding from the banks via the Community Reinvestment Act and other funding sources and then provide for down payment assistance and other housing assistance to persons desiring to own a home.

One of the high points of these programs is that the funding is often times not limited to first time home buyers and certainly is not limited to only low income home buyers. This creates yet another source of down payment assistance for the prospective home buyer. Given the numerous avenues of funding to assist in buying a home and the present market swing in favor of home buyers, buyers are now firmly in the driver's seat.

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