Marketing Basics

The importance of Marketing cannot be overstressed. In order to succeed in the Short Sale business, you need a steady stream of potential clients, and the only way to get that is to make sure that plenty of people know who you are and what you can do for them. In order to increase the effectiveness of your marketing, here are some basic tips.

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The Dos and Don'ts of Newspaper Advertising

One of the most important aspects of the real estate business is Marketing. Without Marketing, you will not have a steady supply of potential clients, which is essential for success.

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How to Save Money While Marketing Successfully

A lot of people are hesitant to spend much money on advertising when they first start out, before they have a significant source of income. This is a huge mistake—Marketing is Essential to starting out in the real estate business. You have to be willing to spend money in the beginning if you want to earn more later on. However, if you don’t have money to spend on marketing, that takes away a lot of your options—advertisements and direct-mail both consume significant amounts of money quickly. If you really cannot afford to spend much money marketing yourself, then you need to come up with cheap alternatives to attract potential clients.

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Forming Your Team: How Do You Find a Title Agent?

An essential element to any Short Sale specialist’s success is a strong team. There are two primary reasons why: first, because you will need the help of other professionals in areas that you do not specialize in; and second, because you want to delegate as much of the work as possible, so that you can focus on finding and completing more deals. When you are beginning to form your team, it is crucial that you keep in mind that these are the people that you will be working with over and over, on many different deals. You want them to be your friends—it will make your life much easier if you get along with your business partners.

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Forming Your Team: Why You Need an Attorney

In addition to the Title Company, another crucial part of your Short Sale team is a Real Estate Attorney, particularly an attorney specializing in foreclosures. An attorney is obviously going to be much more knowledgeable than you are when it comes to legal matters, and since avoiding breaking the law is one of your highest priorities, it is very beneficial to have an expert guiding you through the process. This is particularly useful when you are first starting out, as you’ll still be learning the ins and outs of Short Sales and are much more likely to make a mistake. If you are working in markets located in more than one state, than it is absolutely crucial that you have a Real Estate Attorney on your side, as each state has its own real estate laws and it is very easy to obey the law in one state and to accidentally break it in another. A Real Estate Attorney will be aware of the differences in state law and will help you avoid legal issues.

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How to Get the Deed

First off, it is important that you know what, exactly The Deed is. Most people think that the Deed to a property is a physical piece of paper; however, this is not the case. Rather, it is a Legal Contract that is Notarized and Recorded. With that in mind, one of the first things that you are going to want to do is to get the Deed from the homeowner. Now, you don’t need to explicitly inform the homeowner of why you need for them to deed you the property; more likely than not, they will not fully comprehend the situation and will resist, making the whole process significantly slower and more difficult. Simply tell the homeowner that you need them to sign this form to authorize you, the Short Sale specialist, to negotiate with the bank and the investor. Considering the stress the homeowner is experiencing, it is likely that they will agree to sign this document without thinking twice about it. Although this sounds somewhat dishonest, remember that you are not doing anything wrong. You aren’t trying to trick the homeowner into losing his house—you are simply expediting the process through the easiest means possible.

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What to Do With the Deed

Once you have Obtained the Deed to the property from the homeowner, the question becomes, What should you do with it? In reality, the most important thing to keep in mind once you have acquired the Deed is what not to do with it. Specifically, you should NOT send the Deed to the Lender, even if they ask you to. It is only useful to you so long as it remains in your possession.

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Creating a Buyers List

Once you get your Short Sale approved, you are going to need to have an Investor on-board who will provide the money for the purchase. If you have enough money yourself, then you can act as the Investor, but more realistically you are going to need someone else, especially if you are working on multiple deals at once. If you wait until this point of the Short Sale process to try to find an Investor, than it is entirely possible that you will not be able to find anyone in the allotted amount of time. If that happens, then the deal will collapse and you will have lost thousands and thousands of dollars for no good reason. In order to prevent such a scenario, you need to have a Buyers List before you even begin the Short Sale process. A Buyers List is a database of people who you know are willing to invest in real estate, particularly in Short Sales. These are the people that you are going to approach when it comes time for you to bring in an Investor.

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How Can You Tell Who's Motivated and Who Isn't?

When you use Lead Generation Marketing, you are going to be contacted by many, many people, and you aren’t going to be able to help all of them. In order to maximize your efforts, you need to be able to differentiate between the Prospects and the Suspects—those that are actually motivated to sell and those that think they want to sell but aren’t fully committed to getting rid of their property. Prospects are the people you want to do business with, so how can you tell the difference between the two?

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How to Write a Hardship Document

A Hardship Document is one of the documents that the Lender will ask you to provide as a part of the Short Sale process. It is a description of the Reasons Why Your Client Is in Trouble Financially. Many people do not appreciate this step, and yet it is one of the leading causes for Short Sales to fall apart.

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How to Fight the Foreclosure Sharks

Earlier, we discussed the importance of Obtaining the Deed from the homeowner as soon as possible. One of the principal reasons for doing this is to prevent the homeowner from finding a better deal in a few days or weeks and deciding to abandon you for the new investor, which would result in a loss of time, money, and energy for you. While Obtaining the Deed is an excellent strategy to prevent such a scenario, another method you should also implement is Charging a Fee to Process a Short Sale. Usually, the amount you charge should be around $100. The reason you are charging a fee is because the Short Sale process can be long and demanding, and you want to make sure that you are going to profit once it’s all over. Obviously, the $100 is Not the profit—rather, it’s a means of protecting yourself from Foreclosure Sharks.

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How to Find Pre-Foreclosure Properties

If you are going to succeed in the Short Sale business, you need to have a large reserve of properties that can qualify for Short Sales. Generally speaking, the properties that you should be interested in are ones that are in Pre-Foreclosure. So how do you locate these properties?

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Should You Pursue a Forebearance Agreement?

Within three months of a home entering Foreclosure, you have Nine different options to pursue. One of these options is a Forbearance Agreement. A Forbearance Agreement is when the Lender agrees to not foreclose on the property immediately, even if they legally have the right to, and the homeowner agrees to mortgage plan that will ultimately pay off the outstanding debt.

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Should You Pursue a Repayment Plan?

A Repayment Plan is another option that is available within the first three months of a home entering Foreclosure. In this method, the Lender agrees to accept a smaller amount than is currently owed by the homeowner. Generally speaking, the amount that the Lender expects to receive is about 50% of what is owed. The positive side of this arrangement is that your client will get to keep his house and have a much easier time of paying off his debt. The negative side is that 50% will still be a significant amount, and many people will have difficulty paying that much, even though it is a large reduction. If you choose to pursue this option and all parties agree, and your client does not have enough money to match the new amount, then you need to help your client to discover new means of generating money.

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When to Pursue a Short Sale

The Short Sale is one of the most powerful, most profitable aspects of the real estate business. If you know all of the ins and outs of Short Sales, you can make a huge amount of money in a very short period of time. But before you decide that Short Sales are something that you want to pursue, you need to have a strong understanding of the basics of the Short Sale. The first question you need to be able to answer is, When Should You Pursue a Short Sale?

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How to Fill Out a HUD-1

A HUD-1 form is quite possibly the most important document that you will fill out as a part of the Short Sale process. It is also the document that is least understood by many real estate investors. More deals are ruined by incorrectly filled-out HUD-1 forms than by any other aspect of the Short Sale process, but that’s not all: the consequences for failing to properly complete a HUD-1 form can be Extreme, including Getting Audited, Fined, or even facing Jail Time. Obviously, this is one document that you need to be well-acquainted with.

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The Short Sale Process: Following Up

After your initial meeting with a client, it is imperative that you Follow Up within a very short period of time. Failing to Follow Up is one of the biggest mistakes made my newcomers to the real estate business. They think that once they have the deed they no longer need to maintain close contact with the seller. This is completely wrong. You should get in touch with your client every other day or so. Usually, a simple phone call is sufficient, or even a letter or postcard. You just need to let them know that you are still working on their file, that you haven’t forgotten about them. Also, make sure that your own communication lines are open, so that your client can always reach you. Nothing angers and worries a seller more than being unable to reach the professional who is handling his property.

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Renovation Tips: The Achitect

One of the best ways to maximize your profit on a Short Sale is to Renovate the property before you try to sell it. As you improve the quality of a house, the value rises exponentially, meaning that the more work that you do, the greater the more you’ll earn upon its sale. Some Renovations are relatively minor affairs that you will be able to handle easily, either by yourself or with minimal hired help. However, it is sometimes worth making more significant structural changes to the property, and for that you need a professional Architect.

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Renovation Tips: Major Renovations

When you acquire a new property, you want to increase its value as much as you possibly can before you sell it. Sometimes, the best way to maximize your property’s sell value is by doing Major Renovations. In these cases, there are certain things you should keep in mind that will help you as you decide what alterations to make to the property.

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When to File Bankruptcy?

Filing Bankruptcy is a last resort. If you and the homeowner have exhausted all other options and are still determined to maintain possession of the house, then it is time to consider declaring Bankruptcy, specifically Chapter 13 Bankruptcy. The only time you should really resort to this method is if the home is about to enter Foreclosure and there is no other way to stop the process. If this is the situation, filing Bankruptcy is a way to prevent Foreclosure.

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How to Raise Money

No matter how skilled you are, you are going to have to spend money before you can earn a profit. There are always costs inherent in starting a new business, and Short Sales are no exception. Fortunately, there are a number of different methods you can pursue to Raise Money.

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How to Behave - The Introduction

Although it seems like a very simple aspect of the Short Sale process, many people do not understand the importance of Behaving in a proper, humble, respectful way towards potential clients. The key is to maintain a balance between professionalism and friendship; you want the homeowner to trust you to handle his home and also to feel like you’re his friend. Remember: You Are a Salesman. You need to appreciate selling techniques if you want to convince people to entrust you with both their houses and their financial difficulties.

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How to Behave - The Deal

After the initial introduction, it is time to move on to The Solution. Ask the homeowner how far behind he is on the mortgage and whether he intends to keep the house or sell the house. If he wants to keep the house, then there are a number of options to pursue. Oftentimes, however, the homeowner will acknowledge that there is no way he will be able to keep the house. If he says that he’s willing to sell the house, then you should say that’s why you’re there: to buy the house. Before you move on, though, it is important to make sure that the homeowner has realistic expectations for how much money he will receive in exchange for the house. Explain to the homeowner that you are a real estate investor and need to make a profit, and so you plan on executing a Short Sale. The homeowner will get something, but he definitely not be making a profit. It is important that he is aware of the logistics of the situation, so that he does not feel cheated in any way once the deal is completed.

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The Right Mindset

If you are going to be a success in the Short Sale business, you need to really want it. You have to almost need it. You have to be unsatisfied with being average.

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