Hi everyone,
Looking for some advice from people who’ve been through short sales or work in real estate.
My fiancé and I are relocating to a new city and deciding between renting vs buying. In our situation, monthly rent and monthly ownership costs are pretty similar, so buying feels attractive due to the long-term benefits of ownership and stability.
We found a house we really like, but it’s been on the market for 160+ days and appears overpriced based on comps. We’ve already made two offers below list. After our last offer, the seller informed us they are now moving the property into a short sale, and we may have an opportunity to buy it at either our previous offer price or potentially lower (below market value).
Important context:
- The last offer we made is our absolute ceiling (we’re comfortable walking if it goes above that, but don't want that to happen)
- The home appears well maintained and not distressed from what we can tell.
- Days on market are high, and there hasn’t been much visible activity.
My questions:
- For a short sale, is it generally better to hold your strongest offer firm, or lower it slightly to leave room for negotiation with the bank?
- Is there a typical percentage or range where banks are willing to approve short sales relative to market value or loan balance?
- How much competition should we realistically expect on a short sale, given the longer timeline and uncertainty?
- Does the fact that the home seems well maintained (not a fixer, not visibly distressed) affect how aggressive or conservative our offer should be?
- Can short sales still go through a normal inspection and negotiation process, or should we expect limitations there?
- Anything else first-time short sale buyers often overlook or wish they knew going in?
We’re trying to balance being competitive without overpaying or losing leverage unnecessarily. Any insight, personal experience, or advice would be greatly appreciated.
Thanks in advance!
Short Sale Advice — Keep Offer Firm or Leave Room to Negotiate?
byu/GuiltyPurple4462 inRealEstate
Posted by GuiltyPurple4462
4 Comments
*”My fiancé and I are relocating to a new city and deciding between renting vs buying”*
This one’s easy. Don’t buy a house with someone that you are not married to.
To those that are going to comment that it’s fine with a lawyer and documents…sure, but almost no one does that. They buy a house with their boyfriend/girlfriend/partner/whatever, it goes south, and then they post about what a bad decision it was. Just wait until you’re married to buy.
Offer what you feel is comfortable as it’ll ultimately depend on the seller’s lender to approve the short sale.
It’s basically a normal transaction and will take a minimum of 45 days to close escrow.
Short sales will take longer for the Bank to determine what they’re willing to take and respond to the offer usually. Also, I would not expect any negotiation based on the inspection. The bank is going to take what it’s going to take, and the seller likely can’t afford to make any fixes. This is far from a normal sale once the bank is involved.
If you want the house offer what you’re willing to pay to the seller/bank. The bank Will let you know if it’s enough or not, but be ready for a waiting game. This is not when you’re gonna hear back in 24 or 48 hours on usually. This is far from a normal sale at this point. It will be even longer if the owner has not started and been approved for a short sale.
Expect a short sale to take at least twice as long as a conventional sale. Is the sellers a realistic candidate for a short sale. If Bob owes $400k on a ground floor condo in Tampa that has rising HOA does, rising insurance, and flood risk, and nobody will offer Bob more than $320k, his bank might not be willing to eat $100k of losses and might tell Bob.. look Bob you have a $150k a year job and never had trouble paying the mortgage when you were not upside down, either you ride it out or we will simply foreclose and sue you for the deficiency.
Has the seller submitted Loss Mitigation package to the lender. Has the lender stated that it will consider a short sale. Does the buyer’s agent have prior short sale experience. Is there a second mortgage with another lender that will also have to sign off on the sale.
Pursuing a short sale is great if you are in investor or flipper if it does not work out on the the next property. As an end user you can waste a lot of time on this property and miss something else while you wait for it. You should still be looking at other stuff during the process.