When it comes to making an offer to buy a house, it always requires some art and skill, but when it comes to a short sale offer, it gets more complicated. A short sale means that homeowners are selling their home for less than the mortgage value. This means that sellers are very eager to get out of the house, but your offer must be approved by the seller and the seller’s lender.
Submitting a Serious Financial Deposit
There is no specific rule for the amount of money that should be submitted with your purchase offer. Some home buyers put down a serious financial deposit of $1,000, but an amount between 1% and 5% of the sale price reflects the seriousness of the buyer.
Checking Comparable Sales
It can be challenging to know how much to offer in a short sale offer. Some short sale listings may be deliberately priced below market value to attract eager buyers, but that doesn’t necessarily mean the home will sell at that price. The owner might just be testing the waters, and the lender may not be willing to take that level of loss. An experienced real estate agent in short sales can help you determine the appropriate amount to offer.
Avoid Asking for Special Reports or Repairs
Any inspection you request from the seller that requires payment will reduce the lender’s profit. Lower offers are rarely accepted. Do not ask for paid pest inspections from the seller, roof certifications, or home warranty plans. Even if you see a need for major repairs, do not try to negotiate them. You are likely going to need to buy the home as-is.
Allowing the Bank Some Time
Although you may have news in three to four weeks, many lenders take at least six to eight weeks, and sometimes longer, to approve or reject a short sale. Allow two to three months for the process and be prepared to act as soon as approval comes in sooner.
Assuring the Seller That You Will Wait
The biggest issue facing short sale agents and their sellers is buyers who back out. Buyers may be confused by the bank approval process, or they might back out for other reasons. For example, sometimes buyers write offers on multiple homes, hoping to take the first one that is accepted, which is risky and considered unethical by some.
Offering to Cover Seller’s Fees
If there are some closing costs that the seller usually pays in a short sale situation, it’s likely the seller’s lender will cover them. However, if you agree to pay some of those fees, it will earn you points. The lender will receive more money and may lean in your favor, even if the lender receives an offer similar to yours.
Shortening the Inspection Period
Standard purchase contracts give the buyer a specified time frame to conduct inspections. That means the home is essentially off the market while the buyer performs their due diligence, and the sale is not considered valid until that contingency period is removed. Whatever is customary in your state, if you can promise to conduct your home inspections in a shorter time frame – within 10 to 14 days – your offer will be more attractive.
Note: Do not skip the home inspection. Even though you will likely buy the home as-is, it’s best to know the state of the home as is.
Submitting a Strong Pre-Approval Letter
Nothing stands out more among multiple offers than a pre-approval letter from a lender, which is a conditional commitment to lend the buyer a certain amount. The big question in the short sale seller’s mind is whether the buyer is financially capable of closing the deal. Having a written statement indicating that you have the necessary funding to close the sale effectively reflects that you have the financing in place to close the deal.
It comes
Short sale cases come with many complications. Sellers must accept a price that will not cover all their costs, and the lender must agree to the offer. Being generous with your time, money, and requests can do a lot to finalize the deal.
Source: https://www.thebalancemoney.com/how-to-make-a-short-sale-offer-1799173
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