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

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

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. If you’d like to get more educational videos on how you can rock your real estate world and step into a whole new world of wealth
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6 thoughts on “What is a Short Sale? – How Do Short Sales Work?

  1. Excellent tutorial, Chief. I like it. I sure do wish I could find a company that could do this FOR me- I don't have the time to write hundreds of short-sale offers and then wait for months to find out if any of them were accepted. Maybe if I had a team of people working for me, I could do it. Know anyone?

  2. if I knew about short sales, or even had a chance to sell my house back in 2006. I dont think I would have lost the house to foreclosure. it was a sad day.

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