The difference between a short sale and a foreclosure in a nutshell is:

• Who owns the property
• How far along it is in default

A home that is on the market as a short sale is still under the control of the owner, who is attempting to sell the home for less than the amount of the loan balance.

So let’s say the buyer owes $350,000, but the market price for a similar home in his neighborhood (called a “comparable”) is around $200,000. There is no way to sell the home at market value without the bank taking a loss on the loan. This is why it’s called a “short sale”–because it is being sold for a sum that is “short” of the total amount owed. It is a “pre-foreclosure” property because it has not yet been foreclosed by the bank.

A foreclosure, on the other hand, is a property that has already been repossessed by the bank. Also called “bank owned” or “real estate owned” (REO), when you buy a foreclosure, you are negotiating with a bank, not a private party.

Which should I buy?

There is a significant difference between buying a short sale vs. buying a foreclosure. Some great deals are available either way, sometimes as much as 50% off the peak value of the home, but you need to understand a little about how the system works in order to decide which is right for you.

Buying a Short Sale

Buying a short sale means making an offer to the owner, who is the one listing the home for sale, then submitting that offer to the owner’s bank for their approval. Since they are the ones being asked to take a loss on the loan (actually, they may take less than the amount owed and still make a profit, but that is a topic for another article), they essentially need to tell the owner “yes, we’ll accept this offer.”

This is where the deal can get tough. Let’s say you’ve found the perfect piece of real estate, but it’s a short sale. You make an offer, and the owner accepts your offer. His agent then submits your offer to the owner’s bank, who sends it to a short sale negotiator who represents the bank’s interests. This negotiator is often an hourly employee who has no stake in seeing the deal go through.

It is not uncommon for short sales to take from two to 12 months to complete. Months can go by without hearing from the bank at all, and if the owner’s agent is not good at calling the right person in the bureaucracy, the offer can languish with no action until your patience is worn out and you move on to another home.

On the other hand, if the selling agent is familiar with short sales enough to know who to call at the bank and when, the process can go fairly smoothly. I recently made an offer on a home in November 2010, and it closed escrow in late February, so deals can get done. Just be prepared for delays and some extra work on the part of the agents.

Buying a Foreclosure

Buying a foreclosure is usually a much easier process than buying a short sale. That doesn’t mean you should ignore homes for sale that are short sales; if you find your dream home and it is a short sale, it may be better to accept the challenges of that type of transaction.

However, all things being equal, a foreclosure will be much easier to buy for the following reasons:

• The bank already owns the property and does not want to. In a short sale, they don’t yet own it, and are hoping the owner will just keep making their payments.
• The bank is incentivized to ignore short sale offers, because the government offers the banks subsidies for foreclosed homes that are not available to short sale homes.
• While a short sale negotiator is typically an hourly employee with no direct stake in getting the deal closed, a listing broker for a foreclosed property does get a commission. They therefore have an incentive to see the deal through to the end.
• The price is usually discounted aggressively to sell. Although it may seem like it lately, banks aren’t in the business of owning real estate, they just want to make a loan using the home as collateral.
• Since there are fewer bureaucratic decision-makers involved, the process can often take as little as three weeks from offer to closing.

What’s important to you?

Making a decision on whether to buy foreclosures or short sales comes down to analyzing what’s important to you. Foreclosures will generally be easier to buy than short sales, but limiting yourself to foreclosures may mean you are overlooking your dream home if it’s a short sale. After searching for listings that matched our family’s needs, we ended up finding our dream home, but it was a short sale. If having a quick and easy experience is your priority, buying foreclosures may be the best move in your case.

Kevin Harper is a web developer and author specializing in real estate websites and real estate SEO. He covers real estate related topics all over the U.S., from Cincinnati real estate to Asheville foreclosures, and everything in between.

Actually, it doesn’t have to be all that hard or painful. There will be some work involved, but isn’t it worth it to end up in a home you really want to live in at a steal of a bargain? You have to get your home sold first to make it happen, so just grin and bear it.

Whether you’re selling luxury Marco Island real estate or downtown Minneapolis condos, here’s how you can increase the chances of selling your home fast, just like we did.

1. Move 50-60% of your furniture and ALL of your clutter into storage

I know, this is a major pain, but it works. It’s equally hard to sell a cluttered home as it is a vacant home. You want to go for the model home appearance, or some reasonable approximation of it. Few, if any, family photos should be on the wall. Generic artwork is best.

The other day my wife and I were choosing paints for the rooms in our new house, and we commented that the promotional photos near the paint displays make every home look good. That’s because the consumer thinks they’re selling you a paint palate, but in actuality they’re selling you a nicely furnished room. It’s the same with your home. The buyer often thinks they are objectively looking at the house itself, but too often they are really just seeing a nicely furnished room. Give that to them.

How do you do that with kids? Well, we have seven of them, so if we can do it, you can do it. Keep the house relatively clean and create a chore list so that when there is a showing appointment you can quickly get “all hands on deck” to spruce the place up.

2. Vacate the premises for all showings

I’ve viewed homes where the seller is present, and it’s just not a comfortable environment to soak in the features of the house. It is distracting, and I never remember the details of the house when that happens. Face it–you are a distraction to potential buyers, and if you want to get an offer on your home FAST, you need to get rid of all distractions, including YOU. Period, no exceptions.

3. Use a full service real estate agent, not a discount broker

I’m not saying this because I like paying 6%. I’m saying this because a good agent really is worth 6%. It’s the cost of doing business. The bottom line is that you need to have an agent who has some skin in the game to get the deal closed.

The house my wife and I bought was a short sale, and the loss mitigation specialist (a.k.a. the short sale negotiator for the bank) for short sales is always paid by the hour. As a result, they have no skin in the game–that stand to gain nothing if the deal goes through, and they stand to lose nothing if the deal falls apart. There are plenty of things than can (and will) go sideways in a real estate transaction, and you need to have an agent there to go the distance, because that’s how they get paid.

4. Don’t try to get all your money out that you put into it

Anyone with an emotional attachment to the money they put into the house will not be likely to get their house sold in a down market. Why? Because unless you’ve owned your home for 30 years and have tons of equity, you are probably going to lose money on the sale. You have to realize that you stand to gain more on the purchase of your next home at these inexpensive prices than you will save by waiting to “recoup” your investment. It will never happen.

5. Price your home under the competition

A corollary of the above advice is that you don’t want to price you home at or above the market in a declining market. I realize that everyone is “hoping” a bottom is in place, but hope doesn’t sell a house. Price does.

One house in the neighborhood we just moved from had been on the market for the entire five years we lived there. I never saw inside the house to know how it was kept, but they tried using a discount broker and consistently asked at least $15,000 over what the market would currently bear. They followed the market down for five years, losing at least $90,000 in the process–about 40% of its peak value.

That’s a big hit. Don’t make that mistake. Price your home right.

6. Be willing to reduce your price if your original expectations are too high

When we listed our home, we found a comparable home that was almost equivalent to ours and priced it just under that. Two weeks later we checked the prices of every home in the neighborhood and found out that we were still over priced by a whopping $10,000. That’s a lot of money, but if we hand’t reduced our price, we’d still be there today. Instead, we are in the home of our dreams.

You can do the same. It gets more challenging if you are underwater on your mortgage, but the same principles apply. You can’t change the market–it’s best to face reality and take what the market gives you. Hopefully, your dream home awaits on the other side!

Kevin Harper is a freelance author and web developer specializing in real estate SEO. He publishes the Real Estate Marketing Tips newsletter and writes frequently about real estate, investment, and home improvement topics.

More times than I can count, I’ve had to tell an unhappy real estate agent that the website company they just hired for thousands of dollars to do a beautiful real estate website produced a site that was virtually invisible to the search engines. I’ve seen tens of thousands of dollars wasted on bad sites that could never rank well on the search engines–sites where SEO was never on the list of design considerations.

That’s because many graphic designers are not necessarily trained in search engine optimization, sales, and marketing. That said, everyone likes a nice looking site, and the pride of ownership factor should keep us all striving to produce visually compelling websites and blogs.

For the novice real estate agent/blogger, there is no easier way to spice of a real estate site than with some well-placed real state stock photos. To that end, I encourage all of my Real Estate Marketing Tips newsletter subscribers to invest in a small library of real estate stock photography.

In fact, it might surprise some to find out that studies have shown that relevant stock photography can improve the conversion rate of a site. As an author, you can hold the attention of your readership longer with some graphics to break up the text.

As a writer, I prefer more text than rather than less, but that’s not the norm. The right amount of graphics can dramatically increase the professionalism of your site and conversion rate.

You should experiment with what works in your market for your site. You may find that stock photos of homes get better response, or you may find that stock photos of smiling happy couples standing in front of their house work better. There is no single rule. That’s why it’s best to have a variety of stock photos to choose from.

The way I personally manage my stock photo collection is I subscribe to a monthly service that allows me to download 750 photos per month. I subscribe for one month at a time when I want to expand my collection, then I have them on hand for future website, blog posts, flyers, and other marketing materials.

Kevin Harper is an experienced web developer and real estate SEO consultant who builds Realtor websites utilizing real estate stock photos. He publishes a free Real Estate Marketing Tips Newsletter and has a press release copywriting service delivering maximum SEO and media impact. Kevin can be reached at 208-249-8893.

You actually are missing some golden opportunities in the negotiation process if you take the “go it alone” approach and hit the pavement yourself. Sure, you get to fill up your gas tank a few times and get frustrated hearing all the different sales pitches from each builder, but you can live with that. It’s the money you want to save, right?

The problem is that buying directly from the builder with no agent representing you means you don’t have an advocate on your side who knows the market and can potentially bring you better prices and terms. If you use the sales agent assigned to you when you show up in the on-site sales office, they are not acting as your agent but as the builder’s agent. They’re job is to represent the builder, not you.

Use a buyer’s agent to purchase a new home

Whether you’re buying Orlando real estate or Minneapolis lofts, there is a tremendous benefit to using a buyer’s agent to help you buy a new home. Not just any buyer’s agent, of course; it’s important to use an agent who specializes in new homes and knows the local builders. Your agent’s knowledge of the many builders in your area is what will give you the edge over the buyer walking into the model home or sales office off the street.

The reason it’s so beneficial to have a buyer’s representative on your side is that the home builders are in competition for your business. If you don’t know the deals available down the street or across town, you won’t know to bring that up in your negotiation. Besides, who really likes negotiating, anyway? An agent who specializes in new homes and knows those builders will be aware of the buyers’ incentives they offer and can help negotiate one for you.

In addition, when you have a buyer’s agent, they have a legal fiduciary duty to advocate on your behalf. A buyer’s contract with an agent specializing in new home sales ensures that you’ll get better advocacy at the negotiating table and the potential for a sweetheart deal that only an agent who brings the builders volume business could get.

If you want to take on these tasks yourself, here is how to do it in a nutshell.

Run Power

First, make sure you have a wall that you can get power to. Find an outlet you can tie into and that provides a reasonably clear path to run power inside the wall to the new outlet location. You may need to cut 4-6″ holes in your drywall for access at strategic locations, then patch them up later. In most cases, you don’t need to run the wires inside of conduit, but check your local building codes to find out before proceeding.

Next, install an “old work” electrical box in a location behind the TV. You may want to used a recessed box, which recesses the outlet an inch into the wall to allow clearance for some of the narrower flush mounted TV brackets. Now drill holes in the studs if necessary using a long flexible drill bit that is made for that purpose, and run your power from the source outlet through the studs to the new outlet inside the wall.

Run Audio/Video Cables

Now you are ready to run the component and audio cables to the cabinet that will house your cable box or home theatre system. Manufacturers recommend a 12 inch minimum separation between power cords and video cables, so plan accordingly.

First, cut access holes in your drywall as necessary to run 1″ minimum PVC conduit to act as a “cable chase” for your video and audio cables. Make sure you have enough room inside the conduit for all the cables you will need. Purchase a length of conduit and the appropriate bends to go from a box in the back of the TV to the cabinet area. You will need to assemble this cable chase using your access panels cut into the drywall, and secure the entire assembly to the studs using plumber’s strap metal.

Patch Walls

Next, you can patch up your walls and put professional covers on the boxes where your cables come out. Now, run a wire pull (also called a fish tape) through the conduit and measure how long your cables need to be. Purchase the appropriate cables, and tape them together so the connectors are not bunched up together. Remember, you’ll need to fit this bundle of cables through a pretty small tube.

Run your wire pull through the cable chase again and attach your cable bundle to the end. Black electrical tape works great. You’ll also need some conduit lubricant to make your cable pulling a lot easier (don’t use WD-40 with black electrical tape, it will dissolve it and make a mess). Now pull your cable bundle through the wall from one side to the other, and you now have all the electrical connections you need to make your wall mounted flat panel TV function.

Attach Wall Mount Bracket

The last step is to attach a wall mounting bracket to the wall and hook it up to your TV. There are different sizes and models available, but most are universal and fit all TVs within a particular size range. Instruction for attaching them to the studs in the wall and to your TV should come with the device. Just make sure to follow these directions, because most flat screen televisions are heavy and must be mounted directly to studs. You cannot use drywall anchors.

Get assistance to life your flat panel television onto the new wall mount, and congratulations! You now have a professional looking home theatre room. Pop in a DVD of The Other Guys and enjoy!

Minneapolis downtown living is not appealing to everyone, of course, but for many, the city is an ideal place to live, work, and play. Boredom is not part of the fabric of living in the city. It’s possible to have all your essential amenities in life within walking distance.

No doubt, one of the biggest benefits of living downtown is the money you’ll save on fuel. With fuel prices spiking up so dramatically in recent months, long commutes are getting harder on the family budget with every rise in the price of oil. When you live a few blocks from where you work, however, you’ll rarely need to hop in the car for anything.

Sometimes people make the mistake of thinking that there is no escape from a city dweller’s life, but that would be completely and utterly wrong. You can easily retreat from the thick of it all to a quiet river walk, restaurant, roof top, or city park for that serentiy when needed.

In fact, if you choose to buy your own Minneapolis real estate to live in, such as Minneapolis condos with an east facing view of the sunrise or a picturesque view of one of the hundreds of lakes in the city, you can have your own dose of rest and relaxation whenever you choose.

What do foreclosures have to do with rentals? A lot, actually, according to one San Jose property management company. But let’s narrow it down to two major points here: Purchase price and rental price.

Foreclosures affect purchase prices

First, foreclosures affect the price of homes, which affects the investment potential of those homes. If you can’t acquire a property at below market value, you will have a hard time maintaining a positive cash flow on the property as income property. The idea behind income property investing is to build up a portfolio of properties that produce a positive cash flow, adding cash to your bottom line each month. Properties that don’t do this are called “alligators” and will eat your balance sheet for lunch.

Foreclosures affect rental prices

Second, foreclosures affect the rental market dramatically by putting former homeowners out into marketplace to create demand for rental properties. When there are a higher number of potential renters compared to the number of available properties to rent, the price is going to either go up or remain stable. This can help ensure a stable cash flow for the investment property.

These factors combine to create a powerful affect on cash flow for smart investors. When properties are acquired for a portfolio at below market prices and put under professional property management to keep costs down and cash flow high, investors are sure to obtain a higher ROI.

Because of the affect foreclosures have had on these two real estate investment factors (purchase price and rental price ) savvy investors are coming out of the woodwork to participate in the foreclosure investment opportunities that abound. In fact, few rental markets in the country are suffering, and that’s because more people than ever are being forced to rent.

One Colorado Springs property management firm is saying that vacancy rates have decreased significantly in 2010 over 2009 rates. This is good news for real estate investors who are interested in purchasing Colorado Springs rentals as the market is seeking to correct itself from the peak experienced in 2006.

Kevin Harper is a real estate web developer and web copywriter specializing in covering local areas and topics relevant to the United States and Canadian real estate market. He also writes real estate press releases and articles related to Minneapolis Condos and Marco Island Condos.

Some of the markets where the technology is increasingly producing stunning results for those willing to apply it are:

• Real estate marketing
• Mortgage origination
• Online marketing and coaching
• Any marketing campaign that uses phone-generated leads

How it works

Without getting into the technical details of how a typical system works, the outcome is something like the following:

1. The marketer purchases or subscribes to call capture software, usually a hosted web application that acts as a control panel for the marketing campaigns set up to use the system.

2. In the best systems, the marketer can buy phone numbers like web marketers buy domains. Ideally, each phone number will only appear in one advertisement venue, so the performance of that campaign can be tracked closely. The cost for phone numbers varies from $5 to $20 per month, depending on the company and the volume of calls.

3. Next, the marketer advertises in several publications using different call capture phone numbers. For instance, one number may be used for Craigslist ads, another for a particular print publication, and another on the company website.

4. Then you sit back and watch the results to measure performance and collect leads from each source.

Information collected in call capture

Different call capture systems collect varying amounts of sales intelligence and contact information from a lead. Most provide the number the lead called from, even if their number is normally blocked. Most also provide systems for requesting specific information, often in return for free downloads, website access, or other goodies you want to provide.

You can offer free access to search your MLS listings if they go to a specific extension and say their name. Or you can offer a free home valuation in return for leaving their email address with you. There are as many ways to collect valuable marketing intelligence as there are marketers to think of them.

That’s the great thing about a good call capture system. It allows you to apply your own marketing creativity to your own business. You get the ability to measure the effectiveness of your marketing dollars and funnel your resources only into the campaigns that are working for you.

Kevin Harper is a writer, web developer, and SEO specialist covering real estate marketing and real estate call capture systems and software.

A CRM is simply a piece of software that is designed specifically for Customer Relationship Management. CRM software made for realty professionals usually includes a heavy reliance on email autoresponder marketing techniques to keep in touch and nurture your relationship with leads, clients, and potential return clients.

Using a CRM package usually starts with a lead capture website. While there is an art and science to lead capture, the basic process consists of offering a website visitor something of value in return for their contact information. The item of value may be a free report such as a digital download, a book, or access to an MLS home search tool so buyers can search for properties.

Once a lead makes contact with an agent, the CRM is configured to keep in touch using autoresponders, also called email drip campaigns. A series of emails can be written in advance and sent to leads in a fixed sequence to nurture their relationship with the agent and build trust.

At some point during the process, calls to action are conveyed to the lead to help convert their email contact, which is less personal, into a phone call, which is more likely to result in a sale. Agents who receive a phone call from such a qualified lead should be able to escalate the relationship into a face to face meeting and/or buyers agreement to begin the real estate search process.

From the agent’s perspective, a real estate CRM consists of not only the software to automate the lead nurturing process, but the content in the emails that does the heavy lifting of developing the relationship. The agent typically receives regular updates from the software about the leads being captured into the system, as well as tasks that need to be performed by the agent that cannot be automated.

For example, studies have shown that a phone call during the process (perhaps one that comes after an automated email message that tells a lead to expect a call the next day) greatly enhance the lead conversion rates. The bottom line is that the success rate of marketing using a CRM always comes from blend of sales automations technology, human-written content, and well-placed follow-ups and calls to action during the sales process. A well-designed real estate CRM can boost the conversion rates and sales numbers for real estate agents dramatically.

Kevin Harper is a writer and web developer specializing in Oklahoma City real estate and other locations nationwide. He provides real estate SEO and real estate CRM consulting to agents wanting to automate their sales process.

Part of a nearly 100-mile-long chain of hundreds of islands and tiny islets, Marco (as locals call it) is only 24 square miles, making it a fairly exclusive place to live. There many factors making it a desirable place to live or own a second home, however, not the least of which is its white sandy beaches and beautiful ocean views.

There are roughly six miles of these beaches to be shared by its population of about 15,000 residents, although seasonal population swings are not uncommon. This can bring the number of locals up to 35,000 in the winter as “snow birds” flee their colder home states and provinces.

The islet has a rich history, beginning with the pre-columbian Calusa Indians. The Calusas left behind a number of artifacts many of which have been preserved in the Marco Island Historical Museum. The famed Marco Cat wood carving found by archaeologist Frank Hamilton Cushing in 1896 was not so lucky; it was quickly sent to the Smithsonian in Washington, D.C.

There are numerous water front condominiums and detached homes for residents to live in. These include beach front properties or properties facing one of the many canals that give boaters easy access to their home. Marco Island real estate can be found in all price ranges, from mid to high five figures for a small older condo to well over $20 million one of its more exclusive luxury estates.

As one might expect, one can find a wide variety of amenities on Marco Island, including a large selection of world class restaurants, outdoor cafes, and family restaurants. Many of these restaurants are situated in view of Marco’s ocean vistas and wildlife, allowing diners to take in dolphins playing in their coastal habitat while enjoying fine cuisine.

Kevin Harper is a writer specializing in covering diverse locations and local real estate topics around the United States and Canada. For more information on Marco Island Real Estate, including water front properties, view homes, and Marco Island condos, please visit McCartyFlorida.com.