Short Sale Magic – Legit or Not?
The Real Estate industry can be a very profitable and advantageous industry to enter into. For example, many online tutorial guides capitalize on the large demand for information about numerous ways of doing real estate.
The Short Sale Magic Program
One great example is the Short Sale Magic program popularized by Tom Butler. Basically, the program focuses on helping anyone to learn how to find pre-foreclosed homes and how to negotiate Short Sales with mortgage lenders.
Butler has been in the Real Estate business for two decades starting in California buying properties and renting them out. At 28, he earned his first million, but after several years he reportedly lost $400,000 because of the large downturn of the Real Estate industry in the state. He claims that his roller-coaster experience in the Real Estate business provided him with important lessons about the pitfalls of conventional ways of doing business in the industry.
The Secret to Short Sale Magic: Negotiation
The basic principle behind the system of Short Sale Magic includes negotiating Short Sales with lenders on a certain property that is on the verge of foreclosure. The primary point of this system is to search for homes that have a first and second mortgage and try to negotiate a deal with the lender on the second mortgage. Hence, Butler searched for ways to invest in properties until he thought of Short Sale Magic.
The system used in the Short Sale magic program is among the numerous similar programs that are used by most Real Estate agents who are specializing in short sales. Even though the process may be simple, the tasks ahead could be strenuous. The Short Sale Magic program promises to make the workload easy, including making deals with mortgage lenders.
If you are not yet aware, a short sale is a Real Estate deal where a prospective client negotiates with a mortgage lender to receive compensation that is less than the unpaid mortgage payment. It turns out that it is easier for the bank to cooperate if they land on the second position on the property instead of the first position. But a property on a first mortgage is still a prospect for a short sale.
How Do Lenders Really Feel About Short Sales?
Surprisingly, lenders are willing to gain less, since they also don’t want foreclosures. It has negative effects on their accounts and also affects their corporate credit rating. If a person cannot pay their mortgage and the property is on the verge of foreclosure, the lender in the second position will not be compensated once the property is put on sale because it is usually marketed for the right price for the lender in the first position. If a buyer is offering to buy the home on a Short Sale and is willing to pay $10,000 for a $60,000 second mortgage, many banks will prefer this offer than not getting anything once the property goes to auction. Basically, this is the formula that is being followed by Short Sale Magic.