Making Offers on Short Sale Listings

Besides listing and selling a large number of short sales during the last 4 yrs or so I have assisted several buyers. Short sales are a great selection for buyers to take into consideration. The key is what sort of contract is written.
First coming from all, on short sales, DO NOT expect the seller or sellers lender to complete repairs. It will not happen. Do invest as a contingency almost any inspections you might like a buyer want. For instance we always suggest Physical Inspection, Termite Inspection, Roof, Fireplace, Lateral Sewer, Foundation if on hill or there is certainly severe cracks in walls and foundation, HVAC for example. ASK for credit towards buyers closing costs in advance. Do NOT expect sellers lender use a novice home warranty.
OK so that you found a home, you adore it, it is just a short sale and also you invest offer. The sellers lender returns within 3 to 5 weeks and says accepted. You have inspections. Termite shows $10000 worth of damage you are not expecting...Should I cancel contract or what, What you should do is bring in 2 more bids for cost of work to be accomplished in writing, on Licensed vendor letterhead together with pictures and submit to listing agent for you to negotiator for review. Do not expect the bank or seller to fix BUT it is possible to ask the sellers lender to cut back the purchase price accordingly. Depending on how much credit back you wanted upfront depends on whether you can just ask back being a credit towards settlement costs.
Remember your lender has standards. Many lenders will permit approximately 6% credit back towards settlement costs. Any amount above that might must appear final cost. What the negotiators will not tell your opportunity agents is because most often have schedule a fund to deal with items found on inspections. The listing agent has got to require credit back and/or a reduction in price and also has got to provide proof cost of repairs as well as pictures. The negotiators determine if the house is put back on market those items wanting repair or treatment will must be disclosed to next buyer. Most of the negotiators should go to bat and have the credit and/or have the price investors who contain the notes will just state put it back on market or foreclose on it(The INVESTORS result in the sound decision in most cases).
I have successfully negotiated on several short sales home loan business price and/or credit back to buyer when given written bids on LICENSED vendors letterhead in addition to pictures. I will also redo comps showing negotiator other like homes in good repair and condition selling for much higher or at original final cost of short sale property knowning that this have to be taken into consideration. It is not an automated and sometimes we travel but providing there exists strong documentation a buyer should expect to no less than obtain credit to closing costs.
A buyer SHOULD NEVER ASSUME when there is certainly a written short sale approval the trustee sale will be postponed and then dilly dally around with a lender would you not move quickly to have buyers loan approved and close escrow promptly. That is Russian Roulette in Short investor(s) have final say if they feel they'll profit more by foreclosure they are going to just tell the negotiator they are foreclosing. While typically we can easily get an extension for close of escrow there's been circumstances where an extension cord had not been granted and house foreclosed. In essence what I am saying is you are a qualified buyer and high then PLEASE get a pre approved loan UP FRONT prior to a deal SUBJECT to satisfactory appraisal and ratified contract.
Stay on top of your loan officer. Be prepared to take appropriate steps swiftly, provide documentation as needed in timely fashion. In terms of offer price, often the sellers lender is looking for fair market value. So if the comps of similar homes and sq footage is selling in the region for $350000 don't will end up in at $299000. I guarantee you will likely be countered or purchase offer denied. UNLESS there is something seriously wrong with all the home don't choose the jugular. Sellers lender will do their very own appraisals and broker price opinions. What might make sense for your requirements when it comes to bank not foreclosing on the ... stop thinking that majority of my short sales came to an excellent conclusion.
The ones I had difficulties with typically needed additional work compared to market was ready to buy the property. Investors felt foreclosure will bring them more relief than short sale in those cases.
In Summary: short sale listings should be considered by buyers and they do close and most are closing in todays world within about six weeks to 3 months or less from submission of buyers purchase offer. HAFA short sales are actually taking longer on approval. Depends on if the banks are employing others to negotiate and whom those 3rd parties are. Short sales it's still around for a few years knowning that is why I am penning this article. Do not automatically pass them up.