10 Tips on How to Make a Short Sale Offer

A successful short-sale offer can be a win-win for the buyer and seller. The seller is “off the hook” with the bank, and the buyer walks away with a property sometimes purchased well below market value.

Making a short sale offer is different from a traditional home buying offer because the bank approves the request and, ultimately, the sale. 

However, there are some tips you can use to help improve the chances of your offer being accepted.

Tip 1 - Offer a higher earnest money deposit. 

The best way to get the lender’s attention and show you’re a serious buyer is to come to the table with some cash. An offer paired with a solid earnest money deposit may be enough to get the lender to give your proposal serious consideration.

Tip 2 - Make an informed and competitive offer.

Don’t automatically assume you’ll be able to walk away with a steal of a deal. Your offer should be well-informed and based on comparables for similar properties. Remember that the bank is looking to minimize losses. Sending in a lowball purchase price puts your offer at risk to be tossed aside. Not to mention, you may be competing with other offers.

Tip 3 - Don’t ask for repairs or contingencies.

Short sales are often “as-is.” Most lenders are not going to pay for repairs or offer credits. An offer that asks for these items will likely be declined. Remember, the lender is already taking a loss on the sale.

An offer that’s contingent on anything is going to be less attractive to the lender. If possible, avoid making your contingent on the sale of your current home or other controllable.

Tip 4 - Be flexible.

Things can change throughout the short sale, and you should be prepared to respond to challenges. For example, second or third lienholders may have different requirements. An HOA may require past-due fees to be paid. A buyer that indicates that they’re in it for the long haul will be more attractive to a lender. 

Tip 5 - Don’t automatically expect a counter-offer.

Sometimes the lender may provide a counter, but often they won’t. Don’t send in a low offer thinking that you’ll leave room to negotiate unless you’re willing to risk losing the opportunity to purchase the property altogether. 

Tip 6 - Provide a strong pre-approval letter.

An offer that includes proof that you’ll be able to make the purchase (especially if paired with a strong earnest money deposit) further indicates that you’re a serious buyer. A pre-approval letter will mean a lot more than a pre-qualification letter. 

Tip 7 - Make sure the lender has approved a short sale.

Just because a property is listed as a short sale doesn’t mean that the lender has agreed to it. Do your homework and ensure the listing is a viable option for a short sale before wasting your time and resources.

Tip 8 - Make a cash offer, if possible.

Obviously, this isn’t always possible. However, just like any other seller, the bank will find a cash offer far more attractive than one that deals with financing. 

Tip 9 - Be patient.

Remember that when dealing with a short sale, the process will not move quickly. The lender is not a “motivated seller.” You should expect to wait anywhere from several weeks to several months to hear back on your offer. 

Tip 10 - Consult an experienced short-sale agent.

Navigating the short-sale process can be tricky. Having an experienced agent to act as your advocate and do some legwork on your behalf can make the experience go much smoother.