Why Buyers Should Ask for Proof of Short Sale Offer Submission

Chances are, if you are a buyer and are interested in purchasing a home in Central Florida, you will likely encounter more short sales than traditional or foreclosure listings in your search.

When considering writing an offer on a listing that is a short sale, make sure that your buyer’s agent knows (and is able to explain) the details of the Contract for Sale and Purchase and the required Short Sale Approval Contingency addendum.

If your buyer’s agent is knowledgeable about the short sale process, they can also put a few additional safety measures in place to make sure that if your offer is accepted by the seller, that it is actually submitted to their lender for approval at the price and terms you offered.

A few suggested contingencies/terms that can be added to the Contract:

1) Require the seller/seller’s agent to provide written documentation that the Contract for Sale and Purchase and all supporting documents have been submitted to the seller’s lender within the required timeframe allowed per the Contract. If the seller’s lender is Bank of America, Wells Fargo or another entity that uses a website portal for offer submission, you can ask for copies of the emails showing the short sale process has been initiated.

2) Require the seller/seller’s agent to provide a copy of the preliminary HUD-1 statement (used by the seller’s lender to determine if they will “net” enough money to accept the short sale offer). The purpose of securing a copy of the HUD-1 is to ensure the correct terms have been used when submitted so that no “last minute” surprises come up liked missing seller paid closing costs or an incorrect purchase price.

3) Require that the seller/seller’s agent share correspondence from the seller’s lender that will effect the status of the offer (a counter offer in price, a change of closing date or any other term modifying the terms of the original offer) within 24 hours of receipt from the lender.

Lack of communication regarding the status of the lender’s approval is one of the biggest complaints I hear from buyers who have had a “bad experience” with short sales. By writing in the above terms (along with those already in the Contract for Sale and Purchase & the Short Sale Approval Contingency), the burden of proof is placed on the seller and their agent to fulfill them or the buyer may have cause to cancel their Contract.

For those seeking an experienced Buyer’s Agent in Central Florida who will advocate for your interests every step of the way, I welcome the opportunity to assist you!

Happy Buying!