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By Darryl Davis

RISMEDIA, Sept. 15, 2008-According to the Mortgage Bankers Association, every three months, 250,000 new families enter into foreclosure. One child in every classroom in America is at risk of losing his or her home because their parents are unable to pay the mortgage. One out of every 200 homes will be foreclosed upon. These statistics may be alarming, but they are the reality in today’s market. Fortunately, there is a win-win solution for all parties involved: the homeowner, the bank and the real estate agent.

The recent decline in property values has created many challenges for real estate agents and homeowners alike, but a “Short Sale” could be the key to a happy ending. So, what is a Short Sale? A short sale is a loss mitigation solution. The easiest way to explain a short sale is this: When you go into a seller’s house and ask the magic question, “how much do you owe on your home?” the answer is more than what the current value of that home is. Very simply put, a short sale is when the value of the mortgage is greater than the value of the property.

By definition, any homeowner that is two months late on their mortgage payment and can also demonstrate the inability to pay their mortgage would be considered a short sale candidate. The homeowner is considered pre-foreclosure when the bank officially sends a notice of default or a notice that they’re taking legal action against the homeowner to collect the debt. Contrary to what most agents believe, a short sale can still take place during the foreclosure process. There are only two reasons that a homeowner is not eligible for a short sale:

– The foreclosure has already taken place and the home is up for auction.
– The homeowner files for bankruptcy.

Now that you have a clear understanding of what a “Short Sale” is, you may realize the necessity to participate in this market. As previously stated, the recent decline in property values has created many challenges for real estate agents and homeowners alike. However, a short sale is an answer for all parties involved, and can benefit the homeowner, the lender, and you, as an agent.

The nationwide rise of defaulted mortgages and foreclosures is an opportunity for agents to help the suffering homeowner. As a result the agent is valued greatly. In addition, agents who use short sales ease the strain on the current housing market. Overall, short sales create an opportunity for more listings and buyers, which benefits the real estate agent tremendously. In becoming a specialist in the area of short sales, an agent can assist homeowners in a way that no other professional can: by providing assistance professionally during an emotional time. In the end, there is a very beneficial outcome for the agent as well; they have built their reputation and have new opportunities for referrals.

In summary, Short Sales:

– Create Value for Your Business
– Help the Industry by Easing the Foreclosure Crisis
– Higher Commissions and Increased Business

Now that you are familiar with short sales and why they are beneficial to all parties involved, you may begin to realize that you need to get involved! But, where exactly do you begin? One of the key factors in the outcome of a short sale is the Short Sale Package. This package is so important; acceptance from the lender depends on it.

Listed below is the paperwork required to successfully negotiate a short sale and will be followed by a brief explanation of all the items:

– Authorization to Negotiate
– Signed Sales Contract
– Broker Price Opinions
– Preliminary HUD-1
– Hardship Letter
– 2 months of bank statements (W2, 1099, tax return, etc.)
– Budget Sheet
– Photographs of the home (interior and exterior)
– Repair Estimates
– Newest Comps
– Local Headlines
– Other documents related to current market value (lis pendens listings, sale listings, etc.)

Once you’ve collected all of these items, and have submitted them to the bank by the three methods mentioned above, it’s a waiting game. And, it cannot be stressed enough, that the more complete your package is, the better the outcome will be. While waiting for the bank’s approval, there are many ways to keep the process moving along. It is important to closely watch the deal, as many buyers get anxious and try to break the contract and find a home they can purchase right away with assurance. Another situation to monitor is if the home is vacant, as it is subject to graffiti and loitering. In Darryl Davis’ complete Certified Short Sale Professional home-study designation course,
(, agents learn how to keep the buyer motivated so the sale doesn’t fall through, and how to keep on top of the bank without overstepping boundaries. It’s imperative to portray urgency in the approval of the sale to avoid losing the deal altogether.

With knowledge of all the skills and know-how necessary to complete a Short Sale, you may now be asking, “So I know what to do; now how do I find homes that qualify for a short sale to put my knowledge to use?”

The following is a list of lead-generation sources:

– Lis Pendens list or Notice of Default list
– Advertising, i.e. roadside signs
– Attorneys
– General public and community
– Real Estate agents
– Credit Repair companies
– Mortgage Brokers

As you can see, there is a wealth of lead generation sources out there in your everyday world. Properly utilized, these resources can become a steady stream of income for you and you can build a strong referral base. Short Sales open up opportunities that were once unavailable to you as an agent. For complete details, dialogues and techniques on how to handle these lead sources or how to market yourself as a specialist in Short Sales, be sure to visit us online,

With all this knowledge, you’re sure to be the Short Sale Professional in your market!

To learn more and order the program, visit

About the author: One of the most sough-after speakers in real estate, Darryl Davis has been a Master Trainer and Advisor for the past 15 years. He has been named one of the Highest Rated Speakers at the National Association Of Realtors® Convention for the past 9 years. Darryl has directly impacted hundreds of thousands of real estate professionals with his live events, best-selling books, learning systems and coaching program.