Buying short sale at 50-60% of market value?

[Tom Kirchner]

I have been on webinars and researched other information given by several short sale "gurus" who make it sound fairly easy to find these properties for only 50-60 cents on the dollar.

I wanted to know how realistic this is,and what those of you who have completed deals are really paying for a short sale property.

[Steve Hallman]

Banks sell short at 80-90% of current market value. The trick is to get the bank to sell it for 80% of distressed value and resell it for 90% of retail value.

You know the value is determined by the BPO agent. I know the "GURUS" talk about being there for the BPO and influencing it if possible.

Well, the BPO is the most important factor. BUT here's what the GURUs don't tell you.

The hard part is influencing the BPO agent to value the property as a distressed 30-60 day value. There is a lot of pressure on the BPO agent not to use distressed properties (REOs/Foreclosures) in their comps. If they do, they are guaranteed a "Quality Control" audit. They are scored on their work and may not get more BPOs from the clearing house if they do not maintain a certain score.

What can you do about this?

Maybe nothing just be aware of it.

Try talking about the home owner’s hardship and how they REALLY need this deal to go through. You've got to give the BPO agent a reason to buck the system.

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BIGGEST TIP OF THE DAY........
If you wait till the BPO agent arrives at the property to try to influence the valuation,........ You’re too LATE!

She has already got comps and has formed an opinion about the property’s value.

You've got to tell the bank to have the BPO agent call you 24-48 hours before. Talk to the BPO agent, build rapport. Ask how many BPOs they do. Ask for an email so you can use her service in the future. SEND her a friendly email ASAP and enclose some area comps for her convenience.

Hope this was useful.

Short Sale Investing is not as easy as the Gurus make it BUT they are abundant and have very little risk.

GOOD LUCK!