J.scott Carpenter

Deborah,
Great questions!

The process of getting a short sale approved is a little like a gun fight in the Old West. There are a lot of variables, so the person who controls the variables - survives!

There are several challenges:
1. The seller typically doesn't care what the home sells for, therefore any counter-offer is based on what the listing agent feels will be needed for obtaining an approval from the bank.
2. Usually -but not always- the home has been neglected as the sellers personal circumstances. You have the same inspection rights as any other transaction, but any defects may not be repaired. I am finishing a Rocklin short-sale with Washington Mutual, where they agreed to give credit for Section One pest damage, and that was it.
3. Getting through the short sale approval process in a reasonable length of time. In my experience, the listing agent has to have "special knowledge" to traverse the bank's "loss mitigation" department while everyone is still young. Typically this means knowing someone on the inside that can expedite the process. If the listing agent will only be contacting the "call center", it will take a long time....maybe longer than you can handle. In every short sale I have done, we cut the approval time using "guerilla tactics" with the bank, and "cutting in line".
4. Title insurance and home warranty, if included in the contract, are typically approved. Just be careful of any liens brought about by the seller's financial situation.
5. If your agent wrote the contract with your best interest in mind, you can cancel any time before your contingencies have been removed. After that, the seller can keep your deposit, up to 3% of the value of the property.

Call me if you have any questions.
J.Scott Carpenter, Carpenter Properties, 916-267-SOLD - Sun Jun 22 2008, 13:41