Making an Offer on a Short Sale

Get Preapproved

If you can’t make a cash offer, the next best way to show you’re a qualified buyer is to get pre-approved for a mortgage loan and provide proof of this to the seller’s lender. Try to make an offer with a larger down payment to show you’re serious about buying. Most earnest money deposits are $1,000, but putting down 2% to 3% of the listing price will give your offer a better chance of approval.

Another way to demonstrate that you’re qualified is to place your earnest money into a trust account as soon as your offer is approved.

Rethink Contingencies

Asking the seller to finance inspections or repairs means your offer will likely not be accepted. Remember, the seller may be trying to avoid foreclosure, and their lender will be avoiding taking too much of a loss. Since the seller’s mortgage lender needs to approve any buyer offers, they will probably take yours more seriously if you agree to pay closing costs that the seller would normally be responsible for. The low price you pay for a short sale also comes with repair costs, home warranty plans, special reports, and additional fees.

Confirm the Price

Always call the listing agent to see if offers have been made that are higher than the list price. And if the seller has already accepted an offer, you may just be wasting your time.

Be Realistic About Time Frame

Buying a short sale requires patience, and isn’t for everyone. It can take months to get your offer approved due to a number of factors outside your control. The seller might be uncooperative or slow to provide the documentation that’s required of them, and there are often delays due to negotiations between all the lenders that hold mortgages or second mortgages on the home.

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