Kris Krohn here with REITV. And today
we're talking about short sales, and how they work.
So short sales can be an amazing way for you to get your hands on
a fantastic deal. But it can also be a
tremendous waste of time.
First of all... what is a short sale? Bottom
line, there's a.. there are millions of
mortgages out here in the United States
and from time to time people default.
Right? They get behind other payments and...
the bank says, alright the foreclosure
process from state to state is different,
but it's usually a lengthy process.
The bank says, "That's me
waiting a long time and going through a
lot of proceedings and legal this and
thats to finally get my money and really
resume control of the property." So what a
bank will do, is when they see that
someone starts getting behind on a
payment, their going to try and cut a deal
so they can evade the foreclosure
process if possible, and shorten what
that looks like. What they'll do is
they'll allow the seller the home to
actually list it on the market, at a
reduced price, contingent upon the bank
getting approval.
Normally they're going to list it for a
very low price. So, maybe there's a house
with $200,000.
Maybe they owe $200,000 on it
which means how much equity? None. But
they might have approval from the bank
to consider a short-sell, so they might
list it for $100,000.
Let me ask you. If you were to see a home
available for $100,000 worth
$200,000 might you want to put an offer
on it? Well of course you would! But you
need to look those magic words...
short sale
It doesn't mean that the home will sell for
$100,000. But it does mean that a hundred
thousand people are going to put an
offer on that home. And then what the
owners will do, is they'll take all of
those offers to the bank and say, look at
all of these people willing to buy this
home. The bank might choose to comb
through them, and basically take the very
best... offers and they'll
come back and say, alright, everyone
submit a highest and best offer. And
once in a while, you get to be the
winning bid. And we'll talk a moment
about that bidding process. But
understand this... you might have to make
100 short sell offers just to win one.
So the bad news is... that's a lot of effort.
That's really not my style.
On the other hand, if you do get a
winning bid, there's a good chance that
it's a really good deal. And that there's
going to be tens and tens of thousands
of dollars of equity, if you do it right.
So how would you go about winning a bid if
you wanted to? If you want something done right...
You getting it by now... Don't do it
Yourself. Leverage a team of experts so
when you finally short sales, have
realtors sticking their nose in the game.
Have them putting offers out. Work with
a team. I have a team that will write
a hundred short sell offers every single
week. And they're not using my money,
they're not using my signature. They're
actually just gathering up all of these
deals, and then should one or two of them
six months later actually come through,
guess who gets notified first? Me.
Leverage every part of the game of real
estate, is really about leverage. And
there's a way for everyone to win in the
deal. So let them win. And so, if you are a
control freak and want to be in the
driver's seat. You can find yourself
running around, looking at houses, writing
offers. I skip that type process.
And frankly if you want to learn more about
that, and hit the link below where you
can actually access my team and let them
write a hundred offers every week on your behalf.
Short sales... good or bad?
Well on the one hand, I've made a lot of
money doing short sales. On another hand
I've wasted a lot of time working on
short sales. So ultimately... be smart about
your approach. With what I shared earlier.
I got a team that steps in, and I can bid
on short sales all day long if I'm not
involved, because they're after earning
their commission and making that happen,
and i'll do those deals all day long.
The moment I personally have to get in the
mix to make that happen,
that's way too much work, that's way too
much looking, and that's way too much
waiting. And for me...
the deal of the decade comes along how
often? Every day! So don't...
wait for three months or six months or
nine months for a short sale to go
through, when you could be making
something happen right now.