Question: How Much Should I Offer On A Short Sale Home?

Who pays closing cost on a short sale?

One other drawback in a short sale for the buyer is that you will likely have to pay the full buyer closing costs.

With a more traditional home purchase, you can often negotiate with the seller to have them cover some closing costs.

But in a short sale, buyers are rarely afforded this concession..

How long does it take to close on a short sale?

Once an offer is received and signed, I send it to the bank, along with the seller’s short sale package and a prepared HUD. From that point to the time of short sale approval, the average timeline is about 60 to 90 days. It means 30 days to sell + 60 days for approval + 30 days to close escrow = 4 months, on average.

How can I speed up a short sale?

Speed up your short sale closing date by making your offer as free of contingencies as possible. Submit your mortgage approval with the offer. Contribute a substantial deposit to show your good intentions.

What should I offer on a short sale home?

How to Make a Short Sale OfferOffer a Strong Earnest Money Deposit.Check the Comparable Sales.Don’t Ask for Special Reports or Repairs.Give the Bank Some Time.Assure the Seller You’ll Wait.Offer to Pay the Seller’s Fees.Shorten Your Inspection Period.Provide a Strong Preapproval Letter.

Are short sales cash only?

No cash-out A short sale means they won’t earn any profit from the sale of the house – the bank or mortgage lender gets all the sales proceeds.

Does a short sale benefit the buyer?

For the seller, a short sale presents less damage to his credit report than a foreclosure, and allows him to recover and buy a new house more quickly. This sense of cooperation between the seller and buyer may facilitate the exchange and get the new owner into the house more quickly.

Why do banks prefer foreclosure to short sale?

Banks are run like a business because they are a business looking to earn a profit. If it costs more to foreclose over agreeing to a short sale, the bank is very likely to favor the short sale. With foreclosure, a bank takes possession of the house, then resells it at a mortgage auction to the highest bidder.

Who pays the lawyer in a short sale?

In a traditional real estate transaction, homeowners are responsible for paying the closing costs associated with selling their property. These seller closing costs include things like property transfer fees, realtor commissions and attorney or title company fees.

Why is a short sale bad?

A short sale results when sellers don’t receive enough cash from buyers to pay off their mortgages. Maybe the seller paid too much or borrowed too much for the property to begin with, or the market has dropped so the property’s fair market value is less than the existing mortgage balance.

Can you offer less on a short sale house?

A buyer may offer less but the bank might not accept it. However, if the buyer does offer the preapproved price, the short sale will be approved, provided the buyer qualifies.

Is buying a short sale house a good idea?

Buying a short sale can be a great opportunity to get a property at a reduced price, but it can also have its disadvantages. Purchasing a short sale is a more complicated process than a typical home sale, so there are some unique risks involved when investing in this type of investment property.

Why would a bank accept a short sale?

Why Banks Approve Short Sales Banks are in the business of making money. Banks can sometimes make more money from a foreclosure than a short sale. But more often than not, banks want to minimize losses, and will consider a short sale under the following conditions: Seller provides a documented hardship.

What are the pros and cons of a short sale?

The Pros and Cons of Buying a Short SaleShort sales can take a long time. … They are sold as-is. … Make sure the lower price is really worth it. … The good deal factor can be influenced by the market conditions. … Less competition. … Don’t overlook needed repairs. … Home inspections are a must. … Research the community, get neighbors’ opinions if possible.

Can you negotiate the price of a short sale?

It is entirely possible to negotiate a short sale, but doing so can be a time-consuming process. Instead of negotiating with the seller alone, as is the case with most traditional sales, short sale negotiations must be approved by the lender, too.

How low will a bank go on a short sale?

There’s little room for negotiation with the seller, and it’s unlikely the bank will lower the price at that point. It’s important to be discerning when naming your price because the bank will have its own market value resources and won’t be inclined to approve an offer that’s more than 10% below fair-market value.