How to Approach a Seller for a Short Sale
Negotiating a short sale is possible in today's economy because "over half of homeowners would owe more than their home is worth if they sold today," according to CNN Money. Because most short sales involve homeowners who still live in their homes but have fallen on financial crisis, the good news is that these homes are not the run-down, distressed properties that you often find among foreclosures. Even better, new Treasury Department-proposed guidelines would help to navigate these complex transactions, according to a story in "The New York Times." Buyers should not be hesitant to approach sellers who are facing foreclosure and make an offer on the property that in most cases will be substantially less than the property's value.
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Instructions
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Visit the HUDforeclosed.com web site at http://www.hudforeclosed.com. Find the section tab for "pre-foreclosed" homes. You can search by location, price and location. Contact the seller and offer a reasonable purchase price based on the information provided.
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Approach the seller with discretion. Remember, the seller may be emotional and under a great deal of duress. Homeowners who are facing foreclosure are in financial crisis and losing their home. Using tact and respect toward the seller when you offer a short sale may provide a way out of foreclosure.
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Convince the seller that you are willing to wait it out. "Short sales take much longer to close than more conventional sales, so plan accordingly," advises the website Lawyers.com.
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Contact the National Short Sale Center online or, toll-free, at (800) 401-4638. The Short Sale Center offers free assistance in negotiating the amount owed on a home loan. It was established in 2004 and has a record of success with short sales. The Short Sale Center is an advocate for both buyer and seller as a third-party negotiator. It can also act as a negotiator in removing liens from the property either by lenders or the IRS.
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Be prepared for a counter-offer. Although most sellers are facing foreclosure, their lending institution may still rebuke the deal and the seller may be forced to counter-offer. You have to be prepared to negotiate and be willing to do so. This will enable a bargaining chip for both the buyer and the seller to close the deal.
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Tips & Warnings
Stay in touch with the seller and your real-estate agent by calling your agent weekly. You will need to know what the seller's bank negotiators are doing to expedite the sale.
Be prepared to wait it out. Short-sale transactions usually take a long time. According to CNN Money, "For the sale to go through, the seller's lender must approve the price and agree to take the shortfall as a loss. That extra step can cause the process to drag on three times as long as a normal home sale."
Never put down more than $3,000 on a home before your offer is accepted by the seller and approved by his mortgage lender. This will give you the option of pulling out of the deal if other liens against the property surface and complicate the deal.
