I am a real estate investor and licensed agent. I love the creative and intensity of working with short sales, as I work best under stress and short sales can definitely create that. I have been marketing pre-foreclosures and competing with other agents and investors for the same business. Recently I was doing some on-line studying with one of my investment groups and they discussed working with real estate agents to buy and flip short sales.
I have decided to give it a shot and see just how cooperative agents would be working with me as an investor. The challenge I find is many agents are not willing to. They think I am a scam or are not comfortable working with my system. Now those that are savvy agents, who understand the business and the benefits are jumping on board. I had one associate broker tell me that an agent would be crazy not to work with me, as I do all the work and they still make their commission! It doesn't get any easier than that. The whole idea is to get the process started, as anyone who has worked a short sale knows that it can take time.
Time is the killer for most short sales. One thing is agents usually market short sales wrong. They price them as though they are a non-distressed property. Then it sits on the market for 6 months. Those that do get an offer, I would say 75% of the time the buyer backs out due to the time it takes to get the short sale approved by the lender. Now no buyer and the home is on its way to foreclosure sale. Who wins in that situation-No One!
When I work with a homeowner or agent with a short sale, I make a cash offer. My offers usually start really low, because I need room to negotiate with the lender(s). This is what many agents have a hard time with, but in order for this to be worth my time, I have to get a good discount, and lenders do give them despite what most real estate agents belive. They have a hard time with the idea that I may make $50k on a home, but that is the pay back for the risk I am taking. We all know you can not get every short sale approved at a big discount, but the lenders know it will cost them more to foreclose on the home than take a discount upfront, so it is possible. It is all in the negotiations. Real estate agents are letting the tail wag the dog. Since when did agents let the lender tell them how to do their job?
My question is would you be willing to work with a short sale investor? If so, I would be glad to go further into detail and present you with my program. I am willing to work with agents around the country, but prefer the western states.
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