Here are the basic steps to walk you through a real estate short sale. In case you're new, a real estate short sale occurs when you attempt to negotiate a discount on the mortgage amount of a house you are trying to buy. Usually the property will be in foreclosure and will have no equity. Many times the mortgage amount will be higher than the property is worth, so you negotiate with the bank to accept less than the full mortgage amount.

When working with the seller's bank, you'll find that if any step or component of the real estate short sale is missing, your deal can die in no time. Loss mitigation reps that work for the bank often have 300+ real estate short sale files on their desks, so if you are missing anything your file goes right to the bottom of the stack. This is a list of the minimum you must do. Certain banks and certain situations will likely require other steps.

1) Get a signed 'authorization to release information' from the seller and their spouse (even if the spouse supposedly isn't on the deed or mortgage). Submit the authorization to the bank ASAP since it might take them 48 hours before they log it in their system (no exaggeration).

2) Get a signed sales contract and take unflattering pictures of the house. Get copies of all proof of hardship (late bills, hardship letter, etc).

3) Put together your real estate short sale package to submit to the bank. I will go into detail in a future article about what I include in my package.

4) Find out from the bank's loss mitigation/foreclosure department what fax number or email address or physical address to send the package to. Sometimes when you talk to different people at the bank they will give you different fax numbers that you're supposed to fax your package to. Fax every number you have, because someone will lose your package, guaranteed. Better to have too many of your packages floating around than too few.

5) The bank will likely order an appraisal or BPO (broker's price opinion) to estimate the value of the property. Meet the appraiser/realtor and help them see why the house is worthless.

6) Bank accepts or rejects your offer. If they counter, you counter, they counter, and so on until you agree on a price.

7) Set a closing date and collect your heavily discounted property.

This is an oversimplification but each of those are the major steps. Things get a little more complicated if there is a second mortgage, if you're wholesaling to a cash buyer, and any other assortment of issues that plague any real estate short sale. Check back for future postings that will go into detail on all of the steps, info on finding these deals, and every other aspect of a real estate short sale.

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

Investing In Short Sales
Anyone actively investing in foreclosed and distressed properties has no doubt come across one major problem. Finding deals with equity! Trust us, this is a nationwide problem. There are so many foreclosures out there; unfortunately most of the homeowners owe what their property is worth. We find ... more...

Stop Foreclosure - Are Short Sales the Way to Go?
If you are facing foreclosure, then you have seen the ads for short sales. Real estate agents all over the country are jumping on the short sale bandwagon. However, most are not experienced in short sales and their advice on complicated legal and tax issues can be dangerous for you. What is a short ... more...

Real Estate Investor Training - Short Sales
Because of current economic conditions in the housing market there is a great deal of investor interest in the technique of purchasing investment property with Short Sales. So--what is a Short Sale? A Real Estate Short Sale happens when a seller's bank allows a property to be sold for, and accepts ... more...

Short Sales Can Be Magical
Many investors have heard of a short sale in reference to stocks but few people know anything about real estate short sales. If you are a homeowner who is facing foreclosure or a real estate investor looking to add a new tool to the old toolbox, you need to learn more about real estate short sales. ... more...