Bahareh:
What you save on the 3% or so commission could be lost in seconds after the sale and you find out you - shoudacouldawoulda - done some more research into the home you are buying....

The RE Professional dealing with a short sale has a great deal of work to do for you in protecting your asset - and your bottom line. Most agents that work short sales do this almost exclusively right now - it's so complex and time consuming that they can't really do much else.

If you are still planning on doing this yourself - don't look to the banks to want to spend too much time with or for you. Their main goal is to sell this property and get it off their books. They don't have time to walk you through the process or go back and forth to corporate to see if your "new" terms are acceptable. It's generally an "as-is" sale.

Hi Bahareh,

If I could make a suggestion to you, seek legal counsel. Short sales do not always come out with happy endings. As a buyer without representation you would be relying on the seller's agent to process the deal with the bank unless you had a representative of your own and even then it really is best to seek legal counsel. There are many components to making the transaction work and trying to negotiate with a bank is never an easy thing to do. The banks will not be very helpful to you even though you may be aiding them in the end. Banks require a great amount of documentation that comes from the seller and the seller's real estate representative and again being that you would be the buyer you are on the outside looking in. My best advice for you would be to seek legal counsel and an agent to represent your interest.

I just realized that I did not answer all your questions. Price is typically not fixed. There's always room for negotiation how much the bank will accept is impossible to predict. You may also want to ask how many lenders there are. If there is a first and second loan, negotiations become a bit more challenging as the second is many times not very motivated to cooperate.

Lenders usually have committees that review the short sale packages. The committees only meet once or twice a months and that's one of the reasons why getting an answer from the lender(s) can take a long time. While you can contact the loss mitigation department for the lender (a title company can help you with finding out who the lender(s) are), the loss mitigation department cannot discuss the account with you because of privacy laws and they'll refer you to the listing agent.
There's no all or nothing when it comes to negotiating a contract with the banks. You'll have to expect that the bank will counter high at first and you'll go back an forth more often than you'd with a private seller.

How much time passes before a property goes into foreclosure depends on state law and what kind of foreclosure procedures have to be followed. Theoretically, a bank can consider a loan in default when the borrow is 1 day late. In reality, banks will not initiate foreclosure procedures until the borrower is at least 30 days late. Due to the flood of foreclosures these days, it can take several months before the bank will record a notice of default. I hope this information helps.

Hi Bahareh. Welcome to the land of short sales. Technically, your definition of a short sale is not quite accurate. A short sale occurs when the owner owes more money on the house than what the owner can sell the house for. Since this property that you found is listed with an agent, buying it without being represented by an agent is really not an option. Many potential home buyers have asked the same question before on Trulia and there are lots of threads filled with great opinions on the subject.

The bottom line is, when a property is listed with an agent, the owner has already sign a contract that specifies the total amount of compensation, which includes the compensation for the buyer's agent. While I always lean towards recommending that a buyer be represented by an agent, I would never even think of recommending that a buyer attempt to go through a short sale negotiation on his/her own. Dealing with banks and all the challenges of short selling requires experience and lots of patience. You also want to make sure that you have someone by your side to make sure that all the necessary inspections are done. Believe me, buying a house is not easy. My question to you is, why would you make one of the biggest investments without having an expert by your side? Would you have your hair cut by someone who did not have training? Probably not. Hair grows back faster than recovering from a bad investment.

You certainly can try to put the deal together yourself, I believe you would not get the outcome that you desire. A buyers agent will be able to help you determine what the property is worth and will help you structure the deal to meet your needs. Many people seem to believe that the seller will pass along the savings if they don't have an agent. In reality it will probably end up costing you much more because of the mistakes you will make in putting together the deal. Many banks will not negotiate they will only accept or reject offers. You may have to submit several offers before you reach a level that the bank will accept. Since the seller pays the commissions you have nothing to loose by hiring an agent. I suggest visiting the following website to find a buyers agent. The Real Estate Buyers Agent Council (REBAC) has an on-line directory that will help you find a Buyers Agent that has earned the ABR (Accredited Buyers Representative) designation. An ABR has experience and speciality training to help you with the purchase of a home. http://www.rebac.net/MembershipDirectorySearch.aspx Good Luck!