4 Ways To Craft A Strong Short Sale
A short sale occurs when a homeowner is selling the home for less than the cost of the money that they still own on the home. With a short sale, you need to not just get the seller on board with your buying proposal, you need to get their lender on board as well.
Way #1: Put Down a Larger Earnest Money Deposit
In order to make a good impression on both the buyer and the lender, you are going to want to put down a large earnest money deposit. Although you only have to put down an earnest money deposit of 1% of the sales price, putting down a larger earnest money deposit closer to 5% will make your offer stand out.
Putting money into a trust account will help increase the chance that the seller's lender will accept your offer. Earnest money shows that you are serious and that you want the sale to go through.
Way #2: Avoid Asking for Special Inspections or Repairs
When it comes to a short sale, you are already aware that the seller is going to lose money on the sale of the home and will still owe their lender money. This isn't the time to ask for the seller to pay for inspections for the home or to ask for the seller to pay for major repairs.
Adding these conditions onto your sale will more than likely result in your offer being rejected. When you are purchasing a short sale home, consider it an as-is sale, where you will be responsible for any necessary repairs.
Way #3: Offer to Pay the Seller's Fees
With a regular home purchase, you may ask the seller to pay things such as closing costs. When it comes to a short sale though, the seller is not flush with cash.
Offering to cover expenses such as the closing costs will lend you favor with the seller and will increase the chance that your offer is accepted. It could be the element that allows you to win the home.
Way #4: Plan for a Shorter Inspection Period
Contact and line up a home inspector that you want to work before you put in the offer. When you create the offer, make the home inspection period shorter, such as a week or two, instead of the more typical month-long process with a normal home sale.
This can make your offer more appealing, as with short sales, the seller is motivated to move forward with a sale. Making the inspection period shorter will help move the sale forward faster.
If you want your short sale offer to be accepted, put down a larger earnest money deposit, offer to pay the seller's closing fees, and don't ask the seller to pay for any special inspections or repairs. Add in a shorter inspection period as well. These modifications to your offer should make the deal more appealing to the seller and to the seller's lender, who will both have to approve your purchasing offer.
For more tips on short sales, reach out to a local real estate agent.