The second mistake investors make with investing in short sales is how they handle the incoming calls from sellers. you might be thinking how can you mess this up, well easily!

Most investors, especially new ones, are so excited that the phone has started to ring that they think if a seller calls they have a live deal and they spend their time trying to convince the seller to sell to them as oppose to determining if the home the is being sold is one the investor should buy! There is a big difference.

There are a few steps an investor needs to take on the phone when a potential sellers calls. The first is they need to listen. This is important for several reasons but first is to make sure they are doing the right thing fro the seller. If the seller wants to stay in the home and there is a way for them to do so, then help them as opposed to buying the home out from under them. This is pay dividends in the long run and is just the right thing to do!

Another reason to listen is because you want to know if the seller has a true hardship and you want to let them know you really care. Being a greedy investor will not get you far! As for the hardship, if the seller just doesn’t want to pay then forget getting a bank to agree to a short sale. There needs to be a real reason they can’t pay. You also want to see if they are responsive to your suggestions or confrontational. You only want to work with people who want your help. This alone will say you a ton of headaches!

Now the second step an investor needs to take is asking the right questions. For one you need to know what the mortgage balance is? If the property is not underwater forget getting a bank to agree to a short sale! You also need to know when the actual foreclosure sale is. If the answer is tomorrow forget it!. You need a good 10 working days to stop that from taking place. 

The next question you need to be asking yourself is, what is the exit strategy? Can you sell this home? Is there demand in the neighborhood. Is is a total war zone no one will want to live in? If you can’t sell it move on.

That leave just 2 more important questions. One is are there any repairs needed? This is obvious in that if it needs a lot of work you might not be able to sell it for the price you need to profit. The last is if there is anything else that will affect the value? For example, does the home back up to a freeway? Again if it does you won’t be able to get the price you need so move on. 

Watch the video below for a full explanation of what we’ve covered here.

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