Tips, Short Sale Direct Line, Foreclosed Homes in Colorado

Here are some of the short sale tips for buyers to ensure acceptance and make that deal.

First is to make a short sale offer with a strong earnest money deposit amounting to 1% up to 3% the sales price. It speaks volumes that the buyer is serious about the sale. The minimum down payment for FHA loans is 3.5% of the purchase price and the earnest money is part of that down payment.
The second is to agree to put it into a trust account. It just shows that the buyers are really committed to the transaction because some of the real estate contracts call for the earnest money deposit to be placed into a trust account upon short sale approval. Sellers will most likely want to see that buyers put their money where their mouths are.
The third is to check the comparable sales in the market. Although some short sale listings are deliberately priced under the market value to attract buyers, many banks will only approve short sale that is priced between 5% and 10% under market value. So to save time find those who are reasonably priced under the market.
Fourth, before making an offer, call first the short sale listing agent. The agent must have received several offers and your offer may need to be priced much higher than the list price. Verify that he hasn’t accepted and already sent an offer to the bank or else you may be wasting your time.

Fifth, don’t ask the seller to pay for special reports or make repairs. Any request for the seller to pay major repairs or home warranty plans will most likely lower the bank’s bottom line on the HUD-1. And any lowest offers are rarely accepted. Be prepared to buy the home in “as is” condition.

Sixth is don’t ask for approval in 30 days or your offer may get chucked. Give the bank a reasonable amount of time for short sale approval. Although some banks approve short sales in 3 to 4 weeks, many of them take at least 6 to 8 weeks and sometimes longer to approve and reject short sales. Buyers should be ready to immediately act if approval arrives earlier.
Seventh, be ethical and assure the seller you will wait for the approval of the transaction. Some sellers and listing agents face the biggest problem when buyers walk away. There are some buyers who write several offers on dozens of homes hoping to take the first offer that comes. This is against the law unless they can afford to pay all. No listing agent in his right mind would be willing to work on a transaction for several months only to find out that the buyer whose offer was already accepted has vanished into thin air.
Eight, you would have to agree to pay a seller fee to make a short sale offer. Don’t ask the seller to pay for the fees that are customarily paid for by the buyer. Anyway, it’s not the seller who will be actually paying those fees but the bank. The bank will most likely pay those fees like closing costs that the seller typically pays. However, if you agree to pay those fees, even if the bank receives an identical offer, your offer will net the bank more money.
The ninth tip is to provide a strong preapproval letter. A preapproval letter specifies the buyer is actually preapproved. It should be strongly conveyed in the letter that the buyer is financially capable of closing the transaction. This will surely stand out among a sea of prequalification letters.
Last but not least is the buyer needs to shorten his inspection period. A standard purchase contract in California usually gives the buyer 17 days to conduct inspections but if a buyer can do their home inspections within 10 to 14 days, his offer will hold greater appeal because the sale is not considered solid until that period has been removed.

Reference: http://homebuying.about.com/od/shortsale/qt/071709_short-sale-offer.htm