What is a Short Sale? - How Do Short Sales Work?

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Hello again! This is Kris Krohn with REITV. Today we're gonna be talking about short sales!

Are they good, are they bad, are they useful, are they a pain in the butt? You'll find out!

So, short sales is a fantastic way of transacting real estate. It's a great way to get some

fantastic deals. But I'm gonna tell you right now, many people get deeply misled with how

to win the game in short sales.

For me, it's just one of the many sources that I use for tracking down really good deals.

And, here's one of the things I don't tell you about short sales -

A short sale is basically pre-foreclosure. Someone is losing their house to the bank.

And when you're losing your house to the bank, the bank gives you a certain amount of time

to remedy the mortgage, maybe catch up.

And so that person is trying to see if they can actually get away with selling the house

before it goes into technical foreclosure. So, that person is so motivated to move it,

they're going to list it with a price that the bank hasn't even approved!

So often short sales look deceptively like the absolute best deals; better than they

actually are. And the truth, they're not that good a deal. You just don't know.

So what you're ending up doing is you're actually making an offer on a house that may not even

be sold through a short sale. They're just collecting hundreds and hundreds and hundreds

of offers so they can go to the bank and say "Bank, listen, we wanna stay out of foreclosure.

Would you accept any one of these 300 offers?".

And, HOW do you win THAT game, right? I mean, so many people will like, easily get their

house under contract, get it accepted with its stipulation that the bank has to approve it.

They don't realize that they're accepting you know, hundreds of offers. And so, you

have your house under contract for months already, thinking "We're gonna get this deal.

We're gonna get it! We're just waiting on the bank.".

I got something to tell you. You're NEVER gonna get that house UNLESS you know how to

play the odds.

Now how do you do that?

The way to win in the game of short sales is all about putting up bulk offers. Understand

what it is, and then you win by putting out many offers.

In my personal experience, I find that I write on average, my team writes about a hundred

short sale offers a day! And we end up months, months, months; sometimes to nine months down

the road, winning 1, 2, or 3 of those.

Now the ones that we get, THEY ARE FANTASTIC deals! And that's why it's a part of my strategy.

But the biggest thing is you gotta go in realistic. If you're not planning on writing many, many,

many offers, DON'T fall in love with the deal. Don't fall in love with the numbers. Until

the bank comes back and says "You got a deal.".

And I bought some of my best houses this way. But you can't just write a couple of offers

and hold onto them for nine months and think that you're gonna win a deal. Because chances

are, you're gonna waste an entire year of your life, doing what you considered to be

fruitful action, but in the end, it's gonna bear no fruits.

So what's the secret?

Write a lot of offers! And then be patient.

Well, I sure hope you enjoyed today's short car ride and our talk about short sales, and

hopefully it gives you a leg up on the best way of what you can do with them.

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