Short Sale explination

**sierradmax** · 02-11-2010, 07:48 AM

If anyone with Short Sale experience could chime in, that would be great.

I'm looking in the market for my first home. I've made a few offers on owner owned houses which have been rejected or counter-offered beyond my acceptable offering price.

I came across a short sale property, which I made an offer on and the owner approved. The next obvious step is submitting to the lender. The offer approved is substantially less than what the owner lended from the bank but within reason of the assessed value of the house.

I was told the next step would be to sign a P&S with a deposit contingent upon the lenders notice in "X" amount of days. Is this common practice? If I put a deposit down along with the P&S, do I lose the money if I were to purchase a different home? What if the lender counter offers and I back out? Do I still lose the deposit?

Would it be best to seek a real estate attorny in drafting the P&S?

**Gina Kharkats** · 02-11-2010, 11:45 AM

Are you working with an agent? When I am working with my buyers, I prefer to take them only to approved short sales. Why? Because the truth about the short sale is very complicated: in order to begin a process of an approval, the listing agent needs to have an offer from a buyer. Then it is going to be submitted to the bank and might take up to 6 month to get a final approval. Nowadays, the bank has to contact the borrower regarding a modification of the current loan, and borrowers in a lot of cases go for it because they do not want to loose a house. Where does it leave my buyer and me? In a mean time, we are on the market to search for more houses, and we wright other offers hoping than one of them goes through. My buyers wright an earnest money deposit check, I make a copy, and submit the copy along with other docs. The actual check will be cashed only after the formal acceptance of the offer and when we open an escrow.

**BoiseRealEstateSoup** · 02-12-2010, 09:38 AM

Generally, no.

But, without seeing the Purchase and Sale Agreement it's difficult for me to say. In Idaho, we have an addendum that we use that allows you to remove your offer from the bank and keep your Earnest Money.

I'd hope that you have the same addendum as well.