Bank of America sent out nearly 100,000 solicitations to distressed homeowners to offer them a chance at a deed-in-lieu transaction. “Deed-in-lieu” refers to returning the deed to your home to a lender in order to avoid the foreclosure process. You get to walk away from your home, and the lender declares the debt resolved because you returned the home, your collateral. Many lenders have said that they will offer a variety of incentives for this type of transaction because it saves them a great deal of resorces in processing costs even though they may take a hit when they try to resell the home in today’s difficult market.

Some short sale investors are viewing this new trend with concern, particularly since some lenders have stated that they find deed-in-lieu transactions preferable to short sales since short sales take a long time. Additionally, homeowners who are going to lose their homes no matter what may find this to be an acceptable alternative since it is being portrayed as a route to 100% resolving the debt rather than stressing about being followed up with later for the difference just when you have gotten back on your feet.

As a short sale investor, you should not stress about this. There are several homes that will still go through the short sale process, and not all circumstances are going to qualify for a deed-in-lieu transaction. You can point out to homeowners who may be backing out of a short sale that unless the wording in their deed-in-lieu agreement specifies that the debt is considered entirely resolved by the return of the property, as this may not be the case.

Furthermore, while both deed-in-lieu and a short sale do go on your credit history and negatively impact your credit score, a deed-in-lieu remains on your history for a full 7 years, and you may have to request that it be removed. According to new legislation, short sales may be removed as soon as 3 years in some cases.

In fact, some homeowners may opt for a deed-in-lieu transaction in place of a short sale transaction with you. Nevertheless, the current deed-in-lieu “push” could actually be good, since it may put a notch in homes that lenders were unwilling to short sell anyway. Just be willing to answer questions about this sort of transaction, then keep doing your short sales and helping individuals in trouble resolve their housing scenarios.

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As a short sale investor, you may find that there are times when you find a good short sale deal with the help of a real estate agent. Many times, the agent in question will bill him or herself as a “short sale expert,” which may be a title that helps attract listings and implies a familiarity with the short sale process.

As short sales take over more and more of the market, increasing numbers of agents are labeling themselves in this way. But does this actually mean anything? And is the title worth the commission that the individual in question is going to charge someone – probably you?In some cases, working with an agent who specializes in short sales can really smooth the way through the transaction.

If the agent has a contact with the lender who has the lien on the property or has done a good deal of the legwork necessary to set up the property for a short sale, then their commission may be a small price to pay for the time, effort and money you will save getting the deal under way. In cases where the agent actually has standing relationships with lenders or has already set up the property to be short-sale ready, it will likely be worth it to work with them.

But, other “specialists” may have far more limited use. Some agents simply add this description to their list of titles to indicate that they will work with short sales or know the basics about what one is. In this kind of scenario, they may be little help and you may end up spending a lot of time explaining what you are doing or trying to work around them rather than being able to utilize them as part of your team. If the real estate agent in question cannot contribute to the process in a positive manner, then their specialization will probably not be something that makes them an attractive temporary member of your deal-making team.

Of course, if you find the property with the help of an agent who is a short sale experts, then regardless of whether or not that billing is accurate, you will likely have to work with them. However, if you have a choice in the matter, look for agents who have the relationships and experience to actually back up their claims before you sign them on.

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There is definitely no shortage of potential short sale transactions in the current housing market. Actually, according to some estimates, about 1 in every 4 homes for sale is up for short sale. That’s 25 percent of the market! But, with the advent of government programs designed to help homeowners get short sales done in a smooth and efficient manner by working closely with their banks, the short sale process is, for many investors who relied on creativity to get their deals done and sold off to other buyers, becoming more complicated rather than less so.

Luckily, not all of the properties are qualified for these programs, and these properties are far more likely to be distressed than your average primary residence. That is right! I’m talking about vacation homes. Around the country, second homes are hitting the market in record numbers.

In Minnesota, “the Land of 10,000 Lakes,” lakefront properties are succumbing to foreclosure in record numbers as owners struggle to negotiate short sales, while analysts predict a serious foreclosure run on Florida beachfront luxury properties as vacation-home owners in that area try to get out before the oil hits the coast or simply opt to walk away.

Second homes are not qualified for federal assistance or short sale programs of any kind in nearly all cases, making them prime candidates for more traditional short sale negotiations. It’s not that the lenders do not want to make a deal, it’s simply that with the huge emphasis on HAMP and HAFA, most people don’t know that they have any other short sale options available.

As a short sale investor, you can help people whose finances and livelihoods are jeopardized by second homes that they cannot afford and that they are unable to sell in a traditional fashion. These properties are a great source of leads for you for short sales, and often they sell at higher values because they may be viewed as “luxury properties.” Make sure that you do not neglect this great potential source of deals when you are investigating short sale leads.

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