How to Win the Short Sales Game

How to Win the Short Sales Game
  • Opening Intro -

    Playing the short sales market can be compared to playing a game.

    You find a house that you like, you make an offer and you hope that the bank accepts it before your patience runs out or another buyer steps in with a better offer.


To obtain a short sale home you need to possess knowledge, patience and fortitude, attributes that can help you win the short sales game.


Quite easily, you can make an offer for a short sale home and hope that it gets accepted. Just as easily your bank can sit on your offer and wait out your patience. Worse, if another buyer steps in with a better offer that is accepted by the bank, then you’re out of luck. Time and your investment in an appraisal and a home inspection are now gone.

The best approach to buying any short sale home is knowing your local market conditions. For instance, if your market has stabilized and housing prices are beginning to rise, your offer may be deemed too low. By researching home price comparable of recently priced homes, you can spot trends and value the home accordingly. The buyer may have it listed at $160,000, but it is worth closer to $175,000. If you offer a higher amount, the bank will have less of a loss to eat. You should also determine how much the seller owes on his home loan — no bank will take a significant loss in a market that is trending upward.


Short sales can take months to settle if they’re settled at all. Concerning the “knowledge” part of this article, you need to know if there are other liens that are on the property besides the home loan. For instance, the owner could have a second loan and be behind on it as well. He might also owe money on property taxes and association fees. The more liens that are present, the harder it will be to settle this problem. You’ll need plenty of patience to wait for this process to shake out…if it ever does.

Short sales can take months to settle. If there is only one lien, then it is up to the first mortgage provider to make the decision whether to accept your offer or not. This process can take as little as 30 days, but more likely will drag out for 90 days or more. If you are in a hurry to buy a home, a short sale is never a good choice for you.


Well into the short sale process, you may find that your housing market has changed. If home prices are still falling, your offer could look more attractive to the bank. If accepted, you may end up owning a home that doesn’t really present as good a value as you had hoped.

On the other hand, if home prices are rising, the bank could reject your offer or counter with a higher amount. That $170,000 you offered for the home may not be enough. The bank may value the home at $180,000 or more and want you to come in closer to its higher amount. You can choose to walk away from the deal or counter and hope that the bank accepts your offer.


When making an offer on a short sale loan, your offer goes to the homeowner who then presents it to the bank, if accepted. The bank is not required to accept an offer that has been presented to it by the homeowner. Work with a real estate agent that is experienced in short sales and can move the process along as quickly as possible, with you hoping for the best.


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Categories: Home Buying

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Matt's Musings", his personal blog. Matt covers campus, consumer, business and financial topics on various websites and blogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".