As with almost everything these days technology seems to dominate how we do things. We can see technology in almost everything but it is most obvious with our use of the home computer. So when it comes to selling our most prized and most expensive possession, our homes, then naturally we turn to the internet as a primary vehicle for marketing. There are many web sites that allow you to advertise your property on their sites. Maybe they charge a fee or maybe you can do it free. Do a bit of research and see what is available out there. Try a few out and gauge the response.

You can get all the information you think important into your advertising, regardless of how much there is. However, do not get carried away. You need to keep the readers interest, so be as brief as possible while still including all those important bits of information. As the property owner you can give personal testimony to the things that you particularly like about your property. Its location close to the school, its mechanics pit in the garage or the roomy attic that stores all your treasures. Personal comments can set your advertising apart from professional real estate advertising and can make it more real.

You can put up a good number of photographs to showcase your property. Make them as appealing as possible and choose the best time of day and the best weather conditions to best promote the property. Sometimes a night time shot with all the lights on can look good. Cast a critical eye over the photos before finally making your choice. First impressions count and these pictures will either attract people or turn them away. Make sure that it will be the former.

Video is another exciting option that you could and should employ. It is not that difficult to put something online. In fact if you have young people in the house they may even have used you tube to put a video online before. In fact using you tube is probably the easiest way to get a video online and embedded into your advertising campaign. You can google instructions and video tutorials on how to do it. Give it a try. In fact, if you are skilled in this area you can use you tube as a very effective promotional vehicle to direct prospective purchasers to your property advert.

What are short sale properties?  They are properties that will soon be in foreclosure.  The mortgage borrower cannot make their payments.  Foreclosure is right around the corner.  Homeowners want to avoid foreclosure at all costs.  You may be surprised to hear that lenders feel the same.  Foreclosure proceedings are stressful, lengthy, and costly.  In some instances, a short sale is opted for.  The home is sold before foreclosure.  It is sold for less than the outstanding mortgage amount due.  Typically, this means a good deal for the buyer.

Whether you want to use short sales to make money or save money, preparation is vial to your success.  So, what do you need to be prepared for as a first-time short sale buyer?

To get the run around from mortgage lenders.  A previously stated, lenders consider short sales a foreclosure alternative.  It is their last attempt to avoid it.  Unfortunately, short sales aren’t much better.  Lenders can require delinquent borrower to pay the difference through unsecured, standalone loans, but many simply take the loss.  No one wants to lose money, so you may have to wait and wait.  During this time, the lender is hoping they receive more short sale purchase offers or that the delinquent borrowers come into money.

The possibility of losing money.  As previously stated, short sales present good moneysaving and moneymaking possibilities for buyers.  Typically.  Unfortunately, many properties are financed with two or even three mortgages.  There are also underwater homes, where the borrower owes more than the home is worth.  Short sales mean a loss for lenders, but in these situations the loss is greater.  Always have a property professionally inspected and appraised before the final closing.  To make or save money, only pay less than fair market value.

Constant contact with the mortgage lender or selling real estate agent.  As mentioned above, many lenders give short sale buyers the run around.  In the event that happens, don’t sit back and wait.  Instead, make contact with the representing real estate agent, lender, or both.  If you find yourself waiting after two months, be firm in your stance.  Demand an answer to your purchase offer in two weeks or state you will withdraw your offer.

More waiting.  If your purchase offer is accepted, you may have to wait a few days or even a month to gain access to the property.  One of the reasons why homeowners prefer short sales is because they stay in the property.  As previously stated, short sales can take time.  Some mortgage lenders give a response and start the sale process within a few days, but others wait months on end.  Since there are no guarantees, current home occupants rarely know ahead of time when they need to be out.  The mortgage lender processing the sale may give them a week or more.

Right about now, you may think that short sales are more trouble than they are worth.  They are not, especially when compared to foreclosures.  You deal directly with a professional real estate agent or lender, as opposed to bidding in a fast-paced auction.  You get a property where the current occupants are prepared to leave; they don’t have to be forced from the home.  Yes, buying short sales may be a long and bumpy road, but it is worth the ride for most.

If you are new to buying real estate and want to profit from buying and reselling or buy a cheap first home, please continue reading on a for a helpful list of dos and don’ts for foreclosure short sales.

DO know what short sales are.  You cannot profit from foreclosure short sales if you are unfamiliar with them.  Short sales involve selling a property for less than the outstanding mortgage amount.  For example, if a borrower owes $80,000 on the home, the lender may accept around $70,000 or less.  In dire circumstances, the home’s original value may not even be considered.  So, that $70,000 may buy you a $125,000 home.

DON’T just focus on foreclosures.  First-time homebuyers and new investors make the mistake of focusing only on foreclosures.  Yes, they are your best chance of getting a great deal.  With that said, remember they are not a walk in the park.  Foreclosure proceedings take months or even years.  At foreclosure auctions, there is a lot of competition, which comes from experts in investing and real estate.  Then, you may be left with home occupants who refuse to leave.  Short sales eliminate this problem.  Mortgage lenders and borrowers reach the decision together.

DO actively search for short sale properties.  Unlike foreclosures, information on short sales will not just arrive at your doorstep.  Short sale properties are sold either through lenders or professional real estate agents.  It is easier to spot a lender sold foreclosure.  Lenders are not real estate agents.  They are either selling a short sale or a real estate owned (REO) property, either way you can get a good deal.  Real estate agents may not outright state they are selling a short sale property, but they tend to drop hints.  Look for low priced properties or listing with the phrases “lender approval needed,” or “pre foreclosure.”

DON’T fall victim to short sales for underwater homes.  As previously stated, short sales involve selling a home for less than the outstanding mortgage due.  This should result in a good deal, but not always.  Due to depreciating home values, many borrowers are finding themselves underwater.  This means they owe more than the home is worth.  A typical short sale aims for less than the mortgage.  With underwater homes, the selling price may be more than the home’s fair market value.

DO the research first.  As previously mentioned, short sales for underwater homes aren’t a steal.  In fact, you can lose money.  To prevent this from happening, do the research first.  In fact, real estate buyers should always research.  The home’s last appraised value is public record.  Find it.  Remember, you want a good deal so make sure you are paying less.

DON’T wait forever.  Some lenders drag their feet with short sales.  This is often when a third party investor, such as Wall Street, is involved.  Some buyers are on record as saying it takes months on end to receive a response to a purchase offer.  Don’t wait.  This increases your competition, which may drive up the price.

DO push for an answer.  So, you made a purchase offer on a short sale property, but are still waiting for a lender response two months later.  What should you do?  Of course, you can give up, but push.  Contact the lender directly or the real estate agent in charge of the sale.  State you want the property, but are quickly losing interest.  Plainly state you want an answer in two weeks or else you will withdraw your purchase offer and look elsewhere.  This should do the trick.  In fact, a response may come immediately.

In short, foreclosure short sales are good opportunity for first-time homeowners on a budget or first-time investors looking to turn a profit.  Regardless of which type of buyer you are, do not discount short sales, but do the research first.

When facing foreclosure, one of the first places you should turn to is that of the United States Department of Housing and Urban Development, also known as HUD.  There you will find experts who can help to point you in the right direction.  One direction that you may be pointed to is that of a HUD approved housing counselor.  A HUD approved housing counselor can give you tips on how to avoid foreclosure.  However, if you have reached the point where foreclosure cannot be stopped, assistance on picking up the pieces and finding a new home will be provided.

Another professional that homeowners facing foreclosure should turn is to that of an attorney.  Should you decide to contact an attorney for legal advice, it is vital that you select one who has experience dealing with real estate and foreclosure cases.  As for how a lawyer can help you, they may be able to stop the foreclosure process.  There are a number of ways this can be accomplished.  An attorney can and should be contacted in the event you find yourself a victim of a foreclosure scam or if you feel you are being discriminated against by your mortgage lender.

Although it is best that you seek professional assistance, such as the assistance of an attorney or a HUD approved housing counselor, you may want to turn to those around you.  As embarrassing as it may be to admit that you may lose your home, now is the time to receive support and encouragement from close friends and family members.  In fact, they may be able to help you avoid foreclosure.  Can you borrow money from someone that you know?  If so, just make sure that you pay it back and in a timely matter.

Returning back to seeking professional foreclosure advice and assistance, real estate agents can also be approached.  However, it is best if they are contacted as soon as you notice a problem.  If you suspect you may fall victim to foreclosure, contact a real estate agent immediately.  Before your home enters into the official foreclosure stage, it is known as being in pre-foreclosure.  You can still try to sell your home.  You can list your home as for sale by owner, but the knowledge and expertise of a professional real estate agent can help you sell your home faster.

Out of all of the places that you should turn to seek assistance with avoiding foreclosure, the bank is the most important.  Financial lenders want to avoid foreclosure.  Why?  Because they almost always lose money on the sale of foreclosed properties.  For that reason, schedule a meeting, in person, with your lender.  Make sure you meet with someone who is high ranking in the branch, such as the bank president or the chief loan officer.  If you can prove that your financial hardships are only temporary, do so.  This may help to convince your mortgage lender to give you more time.

The internet can also be used to seek foreclose help and assistance.  When using the internet, it is important to proceed with caution.  You, honestly, never know if what you find online is true.  With that said, many states clearly outline their foreclosure laws and homeowner options on their websites.  You may also find detailed information online from homeowners who have been in the same place as you, facing foreclosure.  Other homeowners may share the ways that they were able to successfully stop foreclosure.  In addition to carefully reviewing all information provided to you, do not pay anything. Foreclosure advice can easily be found online free of charge.

But to arrange for a successful short sale with the bank, you have to address the bank’s two primary concerns. These are the obstacles you have to overcome. They are basically the ability of the borrower to repay and the value of the property. For the bank to agree to a short sale, it must be convinced that the borrower has no means to repay and that the property is worth less than it anticipated.

The credit worthiness of the borrower can be substantiated by showing relevant proofs such as pay stubs, unpaid bills, bank statements etc. By including these types of evidence you can show why the borrower has not been able to keep up with payments and as such will not be able to make the loan current. This is the first factor for the bank to consider a short sale.

The other factor the bank has to take into consideration is the current value of the property. To ascertain the value, the bank will arrange for a professional valuation done by a real estate broker. This is called a Broker’s Price Opinion (BPO) or Broker Opinion of Value (BOV).

Normally, the broker will do a drive-by analysis without actually going into the premises. You can reduce the perceived value by meeting the broker personally and pointing out all the defects of the premises. Plead your case by showing the broker your complete short sale proposal to the bank. You can run comparisons for him or her, show pictures, show the broker around the property, present a list of repairs that need to be carried out etc. You can also help the broker get to know the owner of the property (the borrower) by showing pictures of the family and explain how a low BPO can ensure a successful short sale and allow them to start anew. Needless to say, the more you can reduce the perceived value of the property, the higher a discount you can obtain from the bank in the short sale.

As for the amount of discount you can expect, there is normally a general rule of thumb to follow.

82% is what a first lien holder typically accepts. Junior lien holders would accept a lower percentage. However, if the loan has been guaranteed by the government as in the cases of VA or FHA loans, you can expect a lower discount (or higher percentage of the value of the property). Generally short sales on VA loans (called thus because they are guaranteed by the US Department of Veterans Affairs) would be at 91% of the “as is” value of the property whereas for FHA loans (guaranteed by the Federal Housing Administration), the percentage would be within the range of 82 to 87% of the “as is” value.

Your proposal to the bank for a short sale must comprise of certain indispensable items. First off is the Hardship Letter. The Hardship letter must come from the borrower himself or herself. It should specify in detail why he or she cannot continue the repayments on the loan and make it current. Banks and other lenders are not inhumane and can understand if the borrower has lost his job, was hospitalized or suffered a severe loss in finances. But they are not sympathetic in cases of dishonesty or fraud. So it pays for the borrower to be open and honest. Needless to say, the more detailed an explanation given in the hardship letter, the better the chances of a short sale.

Secondly, you need to provide Proof of Income and Expenditure in the form of W2’s, Bank Statements and Pay Stubs etc. These documents are to support the contents of the hardship letter to give weight of evidence of the inability of the borrower to service the loan or make it current. If the borrower is unemployed, put it in writing to state that no pay stubs are included because he or she is not working. Once again, honesty is the best policy. Help the borrower disclose details in bank statements, bank accounts, stocks and shares, bonds, money market accounts, other forms of real estate etc.

If the bank statements or other records indicate unusual deposits or withdrawals, it is necessary to explain each item to the bank. The more extensive these documents are, the better your chances of securing a short sale.

Thirdly, supply the bank with a Listing Agreement. Banks want to be sure that the borrower has done all he can to sell the property before approving a short sale. Thus a listing agreement that shows the buyer has an agreement to list his property in the list of a listing broker gives evidence that efforts have been made to sell.

The next thing the bank would like to see is a Purchase Agreement. This is an agreement to purchase in writing between the borrower and you. This way, the bank will know there is a ready buyer for the property. In addition, the bank may want to see that you have your own loan pre-approved to buy the property at the short sale price. Send the bank a copy of your pre-approval letter to show that your financing is in order.

Fifthly, you should present a Comparable Market Analysis to the bank. This is a list of comparable sales that support the price you are willing to pay for the property. Show lower priced comps sold in the same area within the last six months or so. This will help lower the perceived value of the property when compared with the bank’s BPO.

Details such as how long the property has been on sale may greatly help your proposal. If the properties in the same area have been on the market for a long time (a year or more) without a buyer, it will cause the bank to consider selling it off.

Next, whatever repairs needed by the property should be listed down on paper with their estimated costs. These details will convince the bank that it would not be worth keeping the property in the bank’s inventory because it would cost too much to bring it back to its full value. This helps to reduce the perceived value of the property, thus enhancing the chances of obtaining the short sale and getting a higher discount.

Another important document for the bank is the HUD 1 or Real Estate Settlement Statement. Part and parcel of closing a loan come many types of settlement charges such as prepaid interests, late fees, outstanding payments, escrow reserves for taxes and insurance and the down payment. The HUD 1 stipulates all these charges. The bank needs to know the bottom line i.e. how much it will receive after all these charges have been settled. It is important that the borrower does not receive anything as he is not entitled. If the bank sees the borrower receiving any money, it will never approve the short sale.

Finally, you should submit an Authorization to Release Information Form to the bank. This is a form signed by the borrower to give permission to the bank to talk to you about the loan and short sale. You must show this form to the bank’s Loss Mitigation Officer before he will entertain your request for information on the loan.

These items make up the complete short sale proposal or package. It is extremely important to submit these documents to the correct Loss Mitigation Department officer who has the authority to make the decision about your short sale application.

Taking these steps and submitting these documents will effectively help you overcome the two main obstacles to securing a short sale with the bank.