In other words, if the loan balance is $400,000 but the bank accepts $300,000 as full payoff, then a short sale has occurred.

Many investors find short sales different to negotiate and complete. The reason is that lenders are constantly changing their rules and practices, and short sales by nature are complex and time consuming. This is a reason that many smart preforeclosure investors today choose to outsource their short sales.

Outsourcing your short sales is simple. You would still meet with the homeowner and get all of the necessary paperwork to ensure a complete short sale packet. But after that, the ease and simplicity of outsourcing takes over. The investor simply sends the complete short sale packet to their outsourcing company, and they are the ones that then do all of the work on behalf of the investor.

The investor's time is freed up considerably, as they no longer have to sit on hold, fax paperwork, or do other mundane tasks associated with negotiating a short sale. The outsourced short sale company takes care of all of this work for the investor.

Outsourcing your short sales makes perfect sense as a real estate investor. Since the outsourcing company is working on many files for many different investors, they are building more relationships faster at a wide variety of lenders. They have a larger rolodex of contacts at more banks, and have a proven track record of closing deals with many lenders, thereby making their files and their deals more desirable for the lender to look at.

In today's world of outsourcing, it's no longer necessary for a real estate investor to negotiates his own short sales. In fact, it's not a good use of their time. Preforeclosure investors should be focused on buying and selling properties, not negotiating short sales or faxing documents to lenders trying to get a short sale deal closed.

Outsourcing short sales allows real estate investors to work on more deals at once, and have a virtual team of experts on his staff, without the overhead. The best outsourced short sale companies are paid on performance, after they have negotiated the short sale deal to the price that the investor has set. This makes outsourcing a no risk proposition for the smart preforeclosure investor.