Real estate short sale is a good moneymaking opportunity. You can ensure success of your short sale proposals if you have proper game plan and have good negotiation skills. 

Performing a successful real estate short sale is not as simple as it looks. If you do not have the required negotiating skills to persuade the bank to agree with your offer, no wonder if your proposal gets rejected. The success of the real estate short sale depends upon how prepared are you and how much control you have over the homeowner and the deal. You must follow a proper game plan while you are submitting your offers. You need to be equipped with the necessary tools so that you could turn the ‘NO?of the bank into ‘Yes?

Short Sale: Why Do You Need a Game Plan
Here is an example of a prudent real estate investor who followed a proper game plan to perform a real estate short sale fruitfully. This man, Smith, found two properties on foreclosure. The properties were bought last year, and were financed by the same mortgage company. The mortgage balance was $200,000 and $220,000 respectively. The first property needed repairs worth several thousand dollars, while the other was then being rented for $1,800 a month. There was very little equity on both the properties. Smith made an offer to the bank at $90,000 for the first property and $110,000 on the second property. The bank rejected the proposal. Smith, now, put his negotiation skills. He attached some additional documents to justify his offer, and eventually he got both the properties for a total of $95,000 below market value. He, then, put the first property on sale after rehabbing it for $10,000, and he kept the second property as it was already occupied by a tenant. Now see what did he got. He would make a positive cash flow of around two thousand dollars per month, while his mortgage was very low in comparison to the cash flow. 

The Game Plan of Smith

• He did not accept NO from the bank
• He very well knew what pressure points to touch and how to counter without increasing the order. Did you notice? When bank rejected his offers, he did not raise his offers instantly. Instead of that, he faxed some other documents to justify his offers. That was what made a pressure on the bank to re-think the proposal.
• He just slightly adjusted his approach in order to turn a No into a Yes

What Was The Overall Outcome?

• The homeowner was able to avoid two foreclosures
• The bank was completely satisfied
• Moreover, Smith got two great properties with lots of equity, and a constant good cash flow.

From the above example, you must have now understood why you need a proper game plan in order to perform a successful real estate short sale.

Real Estate Short Sale: What should be your game plan?
You must consider the following things in order to make your game plan strong and to ensure your success.

How to Analyze the Deal
Whether your game plan will work or not, it depends upon how efficient you are to determine the potentiality of the short sale deal. This is the basic thing to decide before you proceed. After all the fruitfulness of the deal depends upon how potential is the deal. Always remember that not all deals are good short sale opportunities. You cannot just go for any homeowner facing foreclosure and considering it as a good short sale candidate. Analyze the deal and review the property. Find out how much you will need to spend for its repair, and whether you will be able to find a potential customer for the same. It is completely your judgment to decide whether the deal is good enough to go ahead with.

Do Not Accept the Rejection Straight Away
Remember, your first offer will almost always be rejected. This does not mean to accept this rejection straight away. This also does not mean to quickly increase your offer. Rather, you should gather certain documents and proof to justify your offer. You can do this by basking yourself certain questions; such as how does the lender determine their bottom dollar, what was the BPO amount, etc. If you are able enough to answer these questions to yourself, you certainly know what should be your next step. You need to do this every time your offer gets rejected. Always keep in mind that rejection must not be the final chapter of your negotiation.

The secret of performing a successful real estate short sale is not to submit an offer and wait for the bank to give you an answer. You need to continuously work on your game plan so that you already know what to do when you face a rejection. Never submit an offer if you are not prepared and do not have a proper game plan.

 

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