How to Win a Short Sale Bid

Buying a house through a short sale is a way to get more for your money.

A short sale is a bank sale of a property that was facing foreclosure; the property is being sold for less than what is owed on it due to circumstances such as negative equity and down housing markets.The bank agrees to sell the property through a short sale as a way to recoup some of the money owed the a house. A short sale property is a good bargain if the buyer is willing to take the time needed to buy a property in this manner.

Things You'll Need

• Phone
• Internet access
• Notebook
• Available funds and good credit

Instructions

1. Determine how much money you have available to spend on a house. Make sure to calculate how much you can afford for a mortgage and compare this against your income and expenses. Calculate how much money you have available for a down payment, closing costs and other fees associated with buying a home.

2. Contact local real estate professionals to ask for listings of available houses that have been registered and listed as short sale properties. Keep in mind that not all properties are available for a short sale, and the decision to be a short sale property is up to the lender who holds the mortgage. Create a list of properties that are listed as short sale that meet your budget.

3. Contact local banks and lenders in your area and ask to speak to a representative who handles short sales. Keep notes regarding who you talked to and when. Request property listings from the lenders and decide which properties are in your price range.

4. Find a real estate agent or a mortgage broker who deals with and has knowledge in short sales. Short sales are a different home buying process, and using a real estate or mortgage professional with experience in a short sale is important.

5. Secure preapproval for a mortgage and start touring and viewing available properties that are in your price range. Decide which property is best suited for you.

6. Make an offer directly to the bank or lender for the property you have selected. Stay in contact with the lender and respond to all requests for information in a timely manner. Keep in mind that the lender will be trying to get the most money out of the property as possible, so be prepared to make higher offers on the property in the event that you have been outbid by another buyer.

7. Continue working with the lender to reach an agreement on the price of the property. Be prepared to walk away and start the process all over again with a different property if the price becomes out of your affordable range.

Tips & Warnings

• Always tour and visit a property before making an offer on it.

• Never enter into a sales agreement for a property you cannot afford.

References

• Internal Revenue Service
• Making Home Affordable

Resources

• Bloomberg