The newest and most popular way to avoid foreclosure and invest in real estate isn’t that new at all. Short sales are becoming increasingly popular due to the fall in home prices and the wave of foreclosures across the country.

For those who haven’t heard of the new real estate buzzword “short sale,” the concept is simple. When a homeowner can no longer pay their mortgage due to extenuating circumstances and does not have a sufficient amount of equity to sell quickly, a discount on the loan payoff amount can be negotiated with the bank.

Real estate agents are really starting to take notice and are beginning to learn this process because they have been bombarded by homeowners who want to sell and cannot afford the commission to sell traditionally. Some changing market deniers view this technique as a waste of time. These agents still gravitate toward home sellers with equity and away from those without. A smart agent sees an opportunity to not only make money, but also to do some genuine good deed in the process.

For real estate investors accustomed to the rapid appreciation of recent years and the overabundance of homebuyers, short sales provide a truly progressive and profitable niche. Gone are the days of double-digit home value gains in a single year, when a home could be bought, held, and sold at an almost guaranteed profit. This is a tough market and if you want a big equity deal, you have to create your own. Short sales are a great way to move with market trends.

Learning the correct way to short sell is absolutely essential. I have personally witnessed an incompetent real estate agent attempt a short sale with disastrous results. The failed deal not only resulted in the loss of a large home purchase, it resulted in a foreclosure for the homeowner. It is true that he may not always succeed and his offer will not always be accepted, but if he does it the right way, his chances increase.

Short sales may seem like the newest way to make money in real estate, but they have been around for many years and will continue to be popular for years to come. Learning how to negotiate a discount on a home loan will always pay off. Not only will you learn an extremely lucrative real estate investment technique, but you will also help homeowners in need.