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This is now the perfect opportunity to learn precisely what you have to do in order to close the short sale. Just because your first offer is denied does not mean that the deal is dead. You must also be prepared if the lender rejects your offer, although some of your initial offers will be accepted.

Here are several key factors that may result in your offer being rejected. The first thing you will want to do before making another offer is find out from the lender exactly why the first offer was rejected.

Your offer was too low, simply speaking! They will not net the required amount needed to justify accepting your short sale offer.

The lender is adamant that they can do better waiting for a better offer or foreclosing on the property.

They do not agree with the terms of your contract or net sheet.

The loan is government insured and therefore they are protected against a foreclosure.

The investors of the loan are asking for more money to close out the loan.

You tick the loss mitigations rep off so bad that the last thing they want to do is help you.

The hardship was not proven enough to persuade the lender to accept a short sale.

The lender would like to explore alternative payment options with the homeowner instead of doing a short sale.

This is another example of your offer being too low. Your offer was much lower than what the BPO assessed the house for.

These are just some of the reasons you may get from the lender for your short sale being rejected but the main thing to remember is that you must at least probe and find the exact reason why.

The lender's number one priority when doing a short sale is how much money they will net, remember. I can confidently say that the main reason your short sale offer will be rejected will be because the offer is too low.

Once you identify the right loss mitigations rep you can simply ask: The best way to find out how much the lender needs to net is to just ask!

" "How much do you need to net if we agreed to a reasonable short sale offer?

The point is that you will never find out unless you throw it out there. That is to be determined after you ask the question. Will the lender tell you how much?

The next best time to ask is prior to the counteroffer, even if you don't find out initially.

You want to start and maintain a constructive dialogue with the loss mitigations rep where you are constantly probing for information that will determine what your best offer will be.

This formula alone will more than pay for the price of this course 1000 fold, if used correctly. From time to time when I'm preparing a counteroffer I use a formula to help me come up with the most accurate guess on what I think the lender is willing to accept, however. I mainly develop my initial offer based on how much equity or profit I want to make with each deal, when I do short sales.

. . Here it is.

Based on the comps then multiply that number by 85%, step 1: I take the estimated or actual BPO amount or the value of the house.

Example:

000 (Estimated BPO value) X 85% = $148.750 $175,

Step 2: I then take the number I got and multiply it by 92%

Example:

850 750 X 92% = $136, $148,

I cannot say that this is exactly it, although I have reason to believe that the lenders use a similar formula when they determine the amount they are willing to accept on a short sale. I would use this final number or something close to give me my counteroffer amount, if this were an actual deal.

I do know that this formula does two things.

It gives me a calculated number to use for my initial offer or counteroffer.

It allows me to breakdown to the lender how I came up with my offer.

At times it may only be hundreds of dollars that you are negotiating. You may have to counteroffer a 3rd or 4th time just to get the amount down to where the lender feels comfortable to accept. Understand that it may not stop with the first counteroffer. Be resilient yet realistic when making your counteroffers.

If you are game for a strategic a methodical approach to negotiating your offers you can always use my 3 step approach to getting your offer accepted.

Step 1: The first offer will be used to get the number that you and the lender are negotiating down to tens of thousands.

Step 2: The first counteroffer will be used to either close the deal or get the number that you and the lender are negotiating within thousands.

The lender is the most flexible and the loss is obviously not as great, usually at this point. Step 3: The second counteroffer will be used to either close the deal or get the number that you and the lender are negotiating within hundreds.

You have to make that decision on a case by case basis. If this is the case does it make sense to continue trying to persuade someone who is not willing to work with you? Period! Sometimes the lender is non-negotiable and will only accept what they will accept. Another thing to consider when determining your counteroffer is if in fact it even makes sense to offer one.

I've seen investors get their short sale accepted but fail to agree to an amount that is highly profitable. The most important thing to remember when making your counteroffer is that the deal has to make sense for you.

But I can say that short sales are big money deals and if you are making offers that do not put a lot of money in your pocket you are probably leaving it on the table for someone else to enjoy, that is something that you must decide. I cannot determine the value of your time and effort, like I mentioned.