BPO is an acronym for Broker's Price Opinion. In general, the term Broker's Price Opinion (BPO) is a method that a Real Estate Broker (or an agent acting on behalf of their employing broker) uses to estimate the value of a Real Estate property/house.
The estimate of value is submitted in a BPO report (2-3 pages) that includes local and regional Real Estate market information, neighborhood analysis, and (comps) properties that compare to the (subject) house that is being valued. This method of estimating a value has similarities to a Certified Market Analysis CMA and a residential Real Estate appraisal.
The following video features one of my students going through the negotiation process, with a financial institution, that will lead to the submisison of a BPO report. I hope you enjoy the video.
David Oswald
Rivers of Income.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to http://www.DavidOswaldOnline.com
Monday, May 11, 2009
Sunday, April 19, 2009
The Value of Outsourcing in Real Estate
Have you ever felt that the world is getting busier and you have less and less time as each year goes by? It is easy to get into this mode of thinking, and run around in circles trying to get everything done. You may have thought the only answer was to employ staff, and deal with the personnel issues and headaches that arise from that, but there is an alternative.
The answer may be to outsource some of the work that you do, particularly the mundane work and work you are not so good at or dislike. When you think of outsourcing, you may think of large companies sending their workload over to China , with local workers losing their jobs, but there is also an increasing market place for outsourcing individual jobs. Any time that you do a job for which the salary would be less than you want to earn, you are devaluing your time in proportion.
The difficult part is that you need to understand that work you outsource will not be done the same way that you would do it. A good rule of thumb is that if it is done 70% as well as you would do it, then it is worth paying someone to do it to free up your time for more valuable tasks. It is easy to find people to take on tasks for you -- for instance, if you would like a website designed or articles written you should try www.elance.com or www.guru.com, where there are many people willing to bid on your project. Often you get what you pay for, and these sites have a feedback system which allows other clients to tell you what they thought of the work.
If delegating the odd task isn't sufficient for you, you could also consider getting a virtual assistant, who is someone who will take care of many of your normal office tasks, but do so remotely via the Internet. They can take your phone calls, type your correspondence, update your blog, etc. You will still be responsible for making your own coffee, however.
Finally, if you are finding short sale deals laborious to complete, there is even an outsourcing solution for that. You can spend your time finding the houses, negotiating with the homeowner and producing a set of documents for the deal you want to make. Then you can pass over these documents to an outsourced short sale company who will take care of all the phoning and faxing to follow up with the lender, saving you countless time spent on hold and doing other mundane tasks. In fact, it's possible that the short sale company will be able to complete the sale better than you could because they deal with the lenders all the time and therefore have developed good relationships.
If you can find some time in your busy schedule to think about where best you can outsource aspects of
your work, then you may be surprised how much more you can get done.
Til next time,
David Oswald
The answer may be to outsource some of the work that you do, particularly the mundane work and work you are not so good at or dislike. When you think of outsourcing, you may think of large companies sending their workload over to China , with local workers losing their jobs, but there is also an increasing market place for outsourcing individual jobs. Any time that you do a job for which the salary would be less than you want to earn, you are devaluing your time in proportion.
The difficult part is that you need to understand that work you outsource will not be done the same way that you would do it. A good rule of thumb is that if it is done 70% as well as you would do it, then it is worth paying someone to do it to free up your time for more valuable tasks. It is easy to find people to take on tasks for you -- for instance, if you would like a website designed or articles written you should try www.elance.com or www.guru.com, where there are many people willing to bid on your project. Often you get what you pay for, and these sites have a feedback system which allows other clients to tell you what they thought of the work.
If delegating the odd task isn't sufficient for you, you could also consider getting a virtual assistant, who is someone who will take care of many of your normal office tasks, but do so remotely via the Internet. They can take your phone calls, type your correspondence, update your blog, etc. You will still be responsible for making your own coffee, however.
Finally, if you are finding short sale deals laborious to complete, there is even an outsourcing solution for that. You can spend your time finding the houses, negotiating with the homeowner and producing a set of documents for the deal you want to make. Then you can pass over these documents to an outsourced short sale company who will take care of all the phoning and faxing to follow up with the lender, saving you countless time spent on hold and doing other mundane tasks. In fact, it's possible that the short sale company will be able to complete the sale better than you could because they deal with the lenders all the time and therefore have developed good relationships.
If you can find some time in your busy schedule to think about where best you can outsource aspects of
your work, then you may be surprised how much more you can get done.
Til next time,
David Oswald
Friday, March 20, 2009
The Value of Mentoring
There's never been a better time to invest in real estate, and fortunes will be made by investors with the market fluctuations we've been experiencing. House prices are, in the hardest hit areas, overshooting on the low side according to experts’ comparisons with salaries and cost of living. These figures had been fairly consistent up to the boom in the early part of this century. Using the techniques of short sales and options you can build a valuable portfolio at a discount price.
You know these things, and you can see where the deals may be found, but it is hard to get going. Some people call it "analysis paralysis". Other people talk about "pulling the trigger". It is easy to be a sponge, gathering more and more information, only to procrastinate when it comes to taking action. There will always be something wrong with every property you look at, if you are concerned to excuse yourself rather than unleash the potential. You make your primary task the analysis of deals, rather than the making of deals, which keeps you busy and poor.
What if you could link up with someone who has done it all before, and will share his confidence that the deal is satisfactory? The perfect deal has never been made, but there are many acceptable deals available, any one of which would advance you on your path to becoming financially independent. There are critical factors which you need to beware of, and an experienced real estate investor, who has been there before and knows what to watch out for can point them out to you.
Certainly, you can learn all the wrinkles of the business the hard way, by making mistakes which will sometimes be expensive, or by failing to take good deals which will certainly cost you in terms of lost profits. This is the way that a great many real estate investors started, and it is the experience of the hard knocks that has made them what they are today. The alternative is to find yourself a mentor who has been there before, and who is prepared to coach you step-by-step. This will help you fast track your investing career to success.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to www.DavidOswaldOnline.com
You know these things, and you can see where the deals may be found, but it is hard to get going. Some people call it "analysis paralysis". Other people talk about "pulling the trigger". It is easy to be a sponge, gathering more and more information, only to procrastinate when it comes to taking action. There will always be something wrong with every property you look at, if you are concerned to excuse yourself rather than unleash the potential. You make your primary task the analysis of deals, rather than the making of deals, which keeps you busy and poor.
What if you could link up with someone who has done it all before, and will share his confidence that the deal is satisfactory? The perfect deal has never been made, but there are many acceptable deals available, any one of which would advance you on your path to becoming financially independent. There are critical factors which you need to beware of, and an experienced real estate investor, who has been there before and knows what to watch out for can point them out to you.
Certainly, you can learn all the wrinkles of the business the hard way, by making mistakes which will sometimes be expensive, or by failing to take good deals which will certainly cost you in terms of lost profits. This is the way that a great many real estate investors started, and it is the experience of the hard knocks that has made them what they are today. The alternative is to find yourself a mentor who has been there before, and who is prepared to coach you step-by-step. This will help you fast track your investing career to success.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to www.DavidOswaldOnline.com
Tuesday, February 10, 2009
Short Sale Secrets
A short sale can be a very good way of investing in real estate, particularly with the current housing market. In 2008, there were 2.3 million households that received some sort of foreclosure notice, and nearly 1 million foreclosures actually went through. With a short sale, your choice of investment includes many of those houses which are threatened with foreclosure, and in which the homeowner does not want to have the specter of a foreclosure on their credit record.
However, if you have never done a short sale before, you will find that there are some tricks to making it go through smoothly and have a successful outcome for you. These short sale secrets can make all the difference between having a happy experience and having a nightmare in trying to buy the house.
If you haven't heard of a short sale before, you need to know that it is buying a house that is going into foreclosure at less than the amount that is owed on the mortgage. Thus, the amount you pay is short of the normally required amount, giving this process its name. As this means that the mortgage is not satisfied in the normal way, part of the process includes negotiating with the lender to take a lesser amount.
Nonetheless, you will be talking with the owner of the house, and providing him with an escape route from the stigma and credit problems of having a foreclosure on his record. Normally you should be able to get his cooperation because of these benefits.
One of the secrets in helping the negotiation is to make sure that you have documentation in the form of recent sales or a Broker Price Opinion (BPO) to convey to the lender what the house may be worth, to support your offer. You should understand that lenders views vary, and it is up to you to convince the lender that your offer is reasonable so that it may be accepted.
Their are several other secrets that will smooth the path of the transaction, and doing your homework to learn about the process beforehand can save you time and money in the long run.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to www.DavidOswaldOnline.com
However, if you have never done a short sale before, you will find that there are some tricks to making it go through smoothly and have a successful outcome for you. These short sale secrets can make all the difference between having a happy experience and having a nightmare in trying to buy the house.
If you haven't heard of a short sale before, you need to know that it is buying a house that is going into foreclosure at less than the amount that is owed on the mortgage. Thus, the amount you pay is short of the normally required amount, giving this process its name. As this means that the mortgage is not satisfied in the normal way, part of the process includes negotiating with the lender to take a lesser amount.
Nonetheless, you will be talking with the owner of the house, and providing him with an escape route from the stigma and credit problems of having a foreclosure on his record. Normally you should be able to get his cooperation because of these benefits.
One of the secrets in helping the negotiation is to make sure that you have documentation in the form of recent sales or a Broker Price Opinion (BPO) to convey to the lender what the house may be worth, to support your offer. You should understand that lenders views vary, and it is up to you to convince the lender that your offer is reasonable so that it may be accepted.
Their are several other secrets that will smooth the path of the transaction, and doing your homework to learn about the process beforehand can save you time and money in the long run.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to www.DavidOswaldOnline.com
Sunday, February 1, 2009
Short Sale Mentorship
What do you do if you have some money that you want to invest in real estate, or you know that you have good credit and would be able to get a loan on an investment property, but you really don't want to pay the usual asking price for a house in the current housing environment? There is a way that you can buy a house for less than the usual price, but without being involved with a foreclosure auction, which can have drawbacks. After all, we have all heard about foreclosures where the house is trashed by the angry ex-owner on being evicted, and an auction on the courthouse steps can be intimidating, not to mention the problem that you have to pay up in cash immediately.
The alternative to buying at foreclosure if you want to buy a house at a bargain price is called a short sale, and it happens at the pre-foreclosure stage, before the owners have been thrown out. If you do not know much about the process, it can be very helpful to find a mentor to walk you through it once or twice.
If you know what you're doing, then the process is quite simple. You simply find a house which is going into foreclosure, where the owner is upside down on his mortgage, which means that he owes more than the house is worth. Because the home still has a mortgage secured on it, you need to deal with the lender as well as the owner to make the short sale purchase work.
You then go through a process of negotiation to arrive at a price that is less than the outstanding debt, but acceptable to the lender to release the lien against the house. This can take a while, and you need to know or find out what to do at each stage in the process. However, with the assistance of a short sale mentor, you will find that you are able to pick up an investment property with relative ease at a bargain price. The market has never been better for finding many choices of houses suitable for a short sale.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to http://www.DavidOswaldOnline.com
The alternative to buying at foreclosure if you want to buy a house at a bargain price is called a short sale, and it happens at the pre-foreclosure stage, before the owners have been thrown out. If you do not know much about the process, it can be very helpful to find a mentor to walk you through it once or twice.
If you know what you're doing, then the process is quite simple. You simply find a house which is going into foreclosure, where the owner is upside down on his mortgage, which means that he owes more than the house is worth. Because the home still has a mortgage secured on it, you need to deal with the lender as well as the owner to make the short sale purchase work.
You then go through a process of negotiation to arrive at a price that is less than the outstanding debt, but acceptable to the lender to release the lien against the house. This can take a while, and you need to know or find out what to do at each stage in the process. However, with the assistance of a short sale mentor, you will find that you are able to pick up an investment property with relative ease at a bargain price. The market has never been better for finding many choices of houses suitable for a short sale.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to http://www.DavidOswaldOnline.com
Thursday, January 29, 2009
David ?The Diamond? Oswald to Host Seminar on Short Sales this Saturday, January 31st from 10 AM until 12 Noon!
Fords, NJ – David “The Diamond” Oswald, a top real estate investor and personality announced a short sale seminar that is being held at The Best Western Palace Hotel at 1050 King Georges Post Road in Fords (Woodbridge), NJ 08863 on Saturday, January 31, 2009 at 10 am until 12 noon on discovering the quickest ways to turn a profit in the world of real estate and short sales.
This event is the latest installment in a series of workshops that Oswald has hosted over with a goal to provide everyone with the information they need to succeed. The primary aim is to introduce attendees to the world of real estate as an investment vehicle and to provide a step by step education on how to get started with little or no money by locating motivated sellers.
These workshops were created out of a sincere desire from “The Diamond” to introduce individuals to the idea of getting out of the rat race and moving into a world where the desires of their heart are attainable. “I speak to so many individuals who are under the false belief that they don’t have a choice in the matter,” says Oswald, CEO of Rivers of Income LLC. “Frankly, they do have a choice but it’s up to them to take that first step. I try to make that step a bit easier.” This event will lead into a 2
Day Seminar in Somerset, NJ on February 28th and March 1 that will give all the info needed to succeed in today’s hottest market.
One of the chief goals of the seminar series is to take the aspects of the misunderstood arena of creative finance and present it in a simple and down to earth method that creates a sense of clarity. “Anyone who attends the seminar will walk out with at least 3 or 4 new ideas on how to create wealth,” says Oswald. “In less than an hour and a half, I’ll be able to show someone the so-called secrets of what goes on.”
The cost of the event is FREE of charge and it promises to be a great opportunity to network as well as get some entertainment and education. “One of the main things that prevents people from getting started in any new venture seems to be a lack of time,” says “The Diamond.” “So I wanted to create a means by which anyone could get their time back by outsourcing a lot of what they are currently doing. That way they could make it happen because it doesn’t happen by itself.”
Please forward this release to any contacts you may have that would be interested in attending. We look forward to seeing you there and make sure to check out http://www.DavidOswaldOnline.com for free coaching calls and information.
To RSVP NOW email us at: info@riversofincome.com
This event is the latest installment in a series of workshops that Oswald has hosted over with a goal to provide everyone with the information they need to succeed. The primary aim is to introduce attendees to the world of real estate as an investment vehicle and to provide a step by step education on how to get started with little or no money by locating motivated sellers.
These workshops were created out of a sincere desire from “The Diamond” to introduce individuals to the idea of getting out of the rat race and moving into a world where the desires of their heart are attainable. “I speak to so many individuals who are under the false belief that they don’t have a choice in the matter,” says Oswald, CEO of Rivers of Income LLC. “Frankly, they do have a choice but it’s up to them to take that first step. I try to make that step a bit easier.” This event will lead into a 2
Day Seminar in Somerset, NJ on February 28th and March 1 that will give all the info needed to succeed in today’s hottest market.
One of the chief goals of the seminar series is to take the aspects of the misunderstood arena of creative finance and present it in a simple and down to earth method that creates a sense of clarity. “Anyone who attends the seminar will walk out with at least 3 or 4 new ideas on how to create wealth,” says Oswald. “In less than an hour and a half, I’ll be able to show someone the so-called secrets of what goes on.”
The cost of the event is FREE of charge and it promises to be a great opportunity to network as well as get some entertainment and education. “One of the main things that prevents people from getting started in any new venture seems to be a lack of time,” says “The Diamond.” “So I wanted to create a means by which anyone could get their time back by outsourcing a lot of what they are currently doing. That way they could make it happen because it doesn’t happen by itself.”
Please forward this release to any contacts you may have that would be interested in attending. We look forward to seeing you there and make sure to check out http://www.DavidOswaldOnline.com for free coaching calls and information.
To RSVP NOW email us at: info@riversofincome.com
Tuesday, January 27, 2009
Overcoming Burnout
I almost thought twice about writing this article here about burnout because I have to confess...I haven't had any feelings of burnout for over 3 years. But then I thought to myself, well that would be reason enough to write on the subject, right? So here goes...
By the way, this article was inspired by individuals who have responded to other articles I've written and have expressed these feelings of constantly being busy. So I wanted to take a minute and tell you how I've overcome burnout. I remember around 2003 when I was in the mortgage industry and working very hard, you know the 12 hour days, the endless phone calls, the constant follow up on details. The one rewarding thing about that time was that I was making good money by doing so. But what some of us are experiencing right now is that we are doing all those things and not even making the good money in return. So it's a feeling of double burnout I would imagine.
Here's what I did...during that time when I was working very hard I first thought that there has to be a different way to do it. I then convinced myself that there was a way to do it without working so hard. So I guess you can say the first step is to simply believe. Once you actually believe it within the core of who you are, you will then start to look for evidence that it is real. I started to look for others who didn't seem busy...and I found some (not a lot, but some!). From there I started to ask them questions and simply listen. I did not listen through the lens of my own thoughts or beliefs; I would just simply listen. What I found was that they had put their own egos aside and got rid of the belief that "they need to do something themselves" because they could do it better or they "didn't have time to train someone else."
My point is this....if you refuse to allow others the responsibility and even the pleasure (believe it or not) to be included and a part of what you are doing, then you deserve to work hard and often. You've actually made your own bed. However, if you can include others, compensate them for the value they bring and create a team that doesn't revolve around you and your ego, then you're on the right path. Think about this, if you are known as a hard working person, you are probably going to attract more of what you're good at...which is nothing other than....hard work. It becomes a never ending cycle. But if people don't associate you with working hard, then you won't be the recipient of that work. Sounds weird, right? Sometimes the truth is a little different, not harder, just different. If you would like to pick my brain further, feel free to reach out. I'm going back to bed...your man...The Diamond.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to www.DavidOswaldOnline.com
By the way, this article was inspired by individuals who have responded to other articles I've written and have expressed these feelings of constantly being busy. So I wanted to take a minute and tell you how I've overcome burnout. I remember around 2003 when I was in the mortgage industry and working very hard, you know the 12 hour days, the endless phone calls, the constant follow up on details. The one rewarding thing about that time was that I was making good money by doing so. But what some of us are experiencing right now is that we are doing all those things and not even making the good money in return. So it's a feeling of double burnout I would imagine.
Here's what I did...during that time when I was working very hard I first thought that there has to be a different way to do it. I then convinced myself that there was a way to do it without working so hard. So I guess you can say the first step is to simply believe. Once you actually believe it within the core of who you are, you will then start to look for evidence that it is real. I started to look for others who didn't seem busy...and I found some (not a lot, but some!). From there I started to ask them questions and simply listen. I did not listen through the lens of my own thoughts or beliefs; I would just simply listen. What I found was that they had put their own egos aside and got rid of the belief that "they need to do something themselves" because they could do it better or they "didn't have time to train someone else."
My point is this....if you refuse to allow others the responsibility and even the pleasure (believe it or not) to be included and a part of what you are doing, then you deserve to work hard and often. You've actually made your own bed. However, if you can include others, compensate them for the value they bring and create a team that doesn't revolve around you and your ego, then you're on the right path. Think about this, if you are known as a hard working person, you are probably going to attract more of what you're good at...which is nothing other than....hard work. It becomes a never ending cycle. But if people don't associate you with working hard, then you won't be the recipient of that work. Sounds weird, right? Sometimes the truth is a little different, not harder, just different. If you would like to pick my brain further, feel free to reach out. I'm going back to bed...your man...The Diamond.
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to www.DavidOswaldOnline.com
Wednesday, January 21, 2009
The Mechanics of Real Estate Short Sales
While you may have an idea of what real estate short sales are, you knowledge may just stop there. When it comes to putting one together, you can find that you do not know where to start. The various parties to the transaction have to be brought into agreement, and the short sale necessarily involves more effort than a simple purchase of a house. So, let's discuss the mechanics of the real estate short sale.
With the increase in foreclosures over the past year, there is no shortage of houses that could be suitable candidates for a short sale. What you need is a house where the lender does not expect to be able to recover all his money from selling it after a foreclosure. The homeowner will often be getting desperate, and you may find that you need to educate him/her on how a short sale benefits them, as compared to going through a foreclosure. Having a foreclosure on one's credit record can be devastating, making it very hard to every own a home again.
The cooperation of the homeowner is essential, and incidentally this is one of the benefits for you compared to buying a foreclosure. Often, angry owners whose houses are being repossessed will take out some of that anger on the house before moving out, damaging the property and sometimes even taking and selling the air-conditioning units and other items. In a cooperative short sale environment, you should not face the same problem.
Once you have found a house that you would like to try to buy at a short sale, you will need to put together an offer that you hope the lender will accept. Although you may have your own idea of the value, or access to sales records in the area, it can help to get a Broker Price Opinion, or BPO, for the property you are interested in. This will show the lender that you are serious, and also give him a third-party basis on which to assess your bid.
With the owner's consent, and the necessary forms, you can approach the lender officially and submit an offer for the short sale. Then all you have to do is wait for an answer from the lender. Unlike a normal house purchase, when your offer is accepted or declined within a day or two, it can take a few weeks for the lender to process and approve a short sale.
If you have the patience and knowledge to go through with a real estate short sale, you will find it can be one of the best ways to buy properties in the current real estate market.
We'll talk again soon,
David Oswald (aka “The Diamond”) is a National Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to David Oswald Online.
With the increase in foreclosures over the past year, there is no shortage of houses that could be suitable candidates for a short sale. What you need is a house where the lender does not expect to be able to recover all his money from selling it after a foreclosure. The homeowner will often be getting desperate, and you may find that you need to educate him/her on how a short sale benefits them, as compared to going through a foreclosure. Having a foreclosure on one's credit record can be devastating, making it very hard to every own a home again.
The cooperation of the homeowner is essential, and incidentally this is one of the benefits for you compared to buying a foreclosure. Often, angry owners whose houses are being repossessed will take out some of that anger on the house before moving out, damaging the property and sometimes even taking and selling the air-conditioning units and other items. In a cooperative short sale environment, you should not face the same problem.
Once you have found a house that you would like to try to buy at a short sale, you will need to put together an offer that you hope the lender will accept. Although you may have your own idea of the value, or access to sales records in the area, it can help to get a Broker Price Opinion, or BPO, for the property you are interested in. This will show the lender that you are serious, and also give him a third-party basis on which to assess your bid.
With the owner's consent, and the necessary forms, you can approach the lender officially and submit an offer for the short sale. Then all you have to do is wait for an answer from the lender. Unlike a normal house purchase, when your offer is accepted or declined within a day or two, it can take a few weeks for the lender to process and approve a short sale.
If you have the patience and knowledge to go through with a real estate short sale, you will find it can be one of the best ways to buy properties in the current real estate market.
We'll talk again soon,
David Oswald (aka “The Diamond”) is a National Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to David Oswald Online.
Thursday, January 15, 2009
What Is A Real Estate Short Sale?
You may have heard a lot recently about the so-called “real estate short sale.” You may also have asked yourself: “what is a short sale?” Certainly, with the increase in mortgage delinquencies and foreclosures, there have been many more short sale investing opportunities.
A short sale is sometimes called a pre-foreclosure sale, and that describes one aspect of it. It is a house sale that takes place before foreclosure is completed, and thus it avoids the property going into full foreclosure. The reason it is called a “short sale” is because the money paid for the house is short of the amount that is owed on the mortgage.
You may be wondering why any lender would agree to such a deal. After all, they are legally entitled to get the whole outstanding amount that is owed on the mortgage. The way they would normally do this is by foreclosing on the house, and then selling the house for more than the debt. However, normality has taken a backseat recently, with the plummeting house prices, and many houses are not worth the amount that is owed on the mortgage.
As a result, the short sale may be the practical answer for the lender to minimize his or her losses. It has been calculated that every house which goes to foreclosure costs the lender more than $50,000, with legal costs, the paperwork and the reselling, etc. If the lender can instead sell the house for a little less than is owed, he may find that an attractive proposition. It also provides money for him more quickly than foreclosing, and then trying to sell the property.
In case you were thinking that this is a good way to pay less for your house than you owe on a mortgage, then you should be aware that a real estate short sale can only be made to an unconnected third-party, and not to your Uncle Charlie who could then sell it back to you and thereby reduce your debt. The advantage to the present owner is that he can avoid foreclosure and consequently he ends up with less of a blot on his credit record. From the standpoint of those looking at getting into short sale investing, it represents a way to make a significant income per actual dollar invested.
Till next time,
Dave Oswald
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to www.DavidOswaldOnline.com
A short sale is sometimes called a pre-foreclosure sale, and that describes one aspect of it. It is a house sale that takes place before foreclosure is completed, and thus it avoids the property going into full foreclosure. The reason it is called a “short sale” is because the money paid for the house is short of the amount that is owed on the mortgage.
You may be wondering why any lender would agree to such a deal. After all, they are legally entitled to get the whole outstanding amount that is owed on the mortgage. The way they would normally do this is by foreclosing on the house, and then selling the house for more than the debt. However, normality has taken a backseat recently, with the plummeting house prices, and many houses are not worth the amount that is owed on the mortgage.
As a result, the short sale may be the practical answer for the lender to minimize his or her losses. It has been calculated that every house which goes to foreclosure costs the lender more than $50,000, with legal costs, the paperwork and the reselling, etc. If the lender can instead sell the house for a little less than is owed, he may find that an attractive proposition. It also provides money for him more quickly than foreclosing, and then trying to sell the property.
In case you were thinking that this is a good way to pay less for your house than you owe on a mortgage, then you should be aware that a real estate short sale can only be made to an unconnected third-party, and not to your Uncle Charlie who could then sell it back to you and thereby reduce your debt. The advantage to the present owner is that he can avoid foreclosure and consequently he ends up with less of a blot on his credit record. From the standpoint of those looking at getting into short sale investing, it represents a way to make a significant income per actual dollar invested.
Till next time,
Dave Oswald
David Oswald (aka 'The Diamond') is a National Real Estate Short Sale and Foreclosure Expert who speaks throughout the United States on Creative Real Estate Investing Strategies. For more information, go to www.DavidOswaldOnline.com
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