This process is complicated and you need a buyer's agent to help you with it.
I would love to help you call me or e-mail me and we can get started.
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Your question is a good one and is being asked by a lot of buyers looking for a good deal in real estate.
First, a short sale is a situation when the owner/seller has little or no equity in a home. This could be for several reasons. The bank or lender then takes over and is control of the offers on the property and all offers are subject to bank/lender approval.
Sometimes this takes months for an approval and you may or may not get the property. This is because the bank/lender may be in another state and there is little or no communication with the bank attorney during the process. The other problem is the mortgage rates fluctuate and may move higher that you expect. You can also lose out on governmental incentives like the $8,000 tax break that expires at the end of November 2009.
In my opinion, if you have an experienced Realtor who can negotiate the best terms in a good location, you will be better off because you can close sooner and be in the your property.
I have invested in properties all over the United States for years and can provide you with good advise from experience in this area. E-mail me at Wayne_Zelenak@yahoo.com, or call me at my office at 609-737-1500 x 262, or visit one of my websites at http://www.WayneZelenak.com
It isn't the owner's choice as to what offer to take, the decision is entirely in the bank's hands now. They are in the driver's seat with this deal. You should get some comps of that area and see where the townhouses have been selling. That will give you some gues as to where to make an offer that will be accepted. If you are using an agent, they will also be able to find out what recent sales were short sales, or not.
You should have your financing all arranged, after the bank gives approval, they often want to close quite quickly.
You should have a lawyer that iknow how to handle short sales. They can take care of all the details for you.
As a buyer, you have to write up an offer. Aside from the standard contract verbage, you have to write the verbage that tells the bank you understand it is a short sale and theoffer is contingent upon the bank's approval. Your agent or attorney can advise you to the exact wording.
Then, you wait for the bank's response to your offer. Once you get that you inspect and get your mortgage commitment if you need it. Your lender will also have to know it is a short sale because when the sellers' bank wants to close, they generally give you very little notice.
An experienced agent in short sales can help you through the whole process. That's just a synopsis of what to expect.