How to buy a short sale home - worth the hassle?

Quote from HarryWombat : Do you honestly believe that buyers would sign contracts which allow the seller to keep their earnest money if the seller rejects the offer?

Down payment is not "Earnest Money Deposits"
Down payment is the amount you pay up front and you pay the rest month by month, just like an auto sale.
Earnest Money Deposits is the amount you pay to show you are serious business, and if the seller/bank rejects the offer, the money will be returned, by a certain number of days. If the money is not back by then, you will win a default penalty + the original money.
Of course if you the buyer walk away from the deal (or default), you do lose that money,

Earnest Money Deposits is supposed to go to third party, like escrow company, not seller or bank. If anyone try to convince you to deposit it otherwise, stay away. If your agent doesn't know the difference, find another one.

Not sure where you are coming from here.

I'm questioning the assertion that buyers lose their earnest money deposit if the seller rejects their offer.

Why you would think that I don't understand the difference between earnest money and a down payment is puzzling.

In Illinois, where I have practiced law for many years, you do not get what you term a "default penalty" by virtue of prevailing in a suit over earnest money.

Perhaps the state in which you practice has different laws.

Quote from HarryWombat : Not sure where you are coming from here. I'm questioning the assertion that buyers lose their earnest money deposit if the seller rejects their offer. Why you would think that I don't understand the difference between earnest money and a down payment is puzzling. In Illinois, where I have practiced law for many years, you do not get what you term a "default penalty" by virtue of prevailing in a suit over earnest money. Perhaps the state in which you practice has different laws.

Sorry HarryWombat, the reply was meant for chuck07, I mess up with the quote, my bad
I am in California, and I am not a realtor/lawyer, just a normal buyer.

Shot in the dark:

Can anyone recommend a realtor with short sale experience in the Tampa area? Also, would it help to wait for financing and finance through the bank that would be approving the deal? Like, if the rates were reasonable, wouldn't that sweeten the pot for the seller's bank?

Quote from HarryWombat : First you say that you "lose your money". Now you back pedal and say that you "won't always get your money back right away" or that "you may have to go to court". I do not believe that people submit offers on short sales to try and pick one off knowing that they will lose their earnest money or have to sue for it if the offer is rejected. I believe that assertion is absurd. First of all the bank is not the seller in a short sale. The bank is the lender. How can they keep your earnest money. (Answer: they can't) Second the seller has no right to keep the earnest money because the bank won't accept the buyers deal.

When you are talking about a couple hundred to a thousand dollars, they could all mean the same.

I think what you mean to say is that no, your agent did not tell you that. Thanks for the information.

People don't buy penny stocks knowing that they will lose on a couple, but when they hit, they hit big?

Here is another yes/no question:
Is the bank a party involved in a short sale that can veto it?

Quote from chuck07 : When you are talking about a couple hundred to a thousand dollars, they could all mean the same. I think what you mean to say is that no, your agent did not tell you that. Thanks for the information. People don't buy penny stocks knowing that they will lose on a couple, but when they hit, they hit big? Here is another yes/no question: Is the bank a party involved in a short sale that can veto it?

Yes, the bank can refuse to reduce the amount of indebtedness and thereby prevent the sale from closing since the seller lacks the funds to settle the mortgage and the proceeds of sale are by definition insufficient to do so.

There is a lot of misinformation in this thread thats for sure.

BlueovalstangGT: you can offer whatever you want for that short sale. In a short sale situation, the bank only cares about the net sale. Even if you do not have an agent, the bank will calculate whatever commission they see fit.

Cash offer does not speed up the process. They go through the same process even if its cash, FHA, conventional, VA, etc...Only certain bank go through the short sale process super fast.

Chuck07: That agent has no clue what he/she is talking about. Losing a deposit or down payment because they rejected your offer is crazy. How can they get your money when you have not even transfer money to escrow or a trust account? Most offers comes with a copy of your deposit check and a copy of your bank statement that shows the down payment. Once my offer is accepted, that is when I will let escrow cash the EMD. Otherwise, I hold on my checks.

I'm 0-2 on short sales. And 0-3 on regular sales. As a buyer, I see NO difference between the two. I write a check each time, but if the seller doesn't accept the offer, I'm not out a single penny. My agent has always been against short sales. But in SoCal, they are now moving at the pace of standard sales. In fact at this time of the year, they may move quicker as some want these properties off their books by years end. So he's changed his mind. In fact I recently put in an offer on a short sale approved at $170k for a condo. My agent informed me the bank said ye who's first in at $170K gets it and should close in less than 45 days. I'm in SoCal. Short sales are not like they were back in the day. If you find one you like....go for it. This horse hockey about losing deposit etc is just that. As a buyer you'll never know the difference between the two except maybe a short takes longer. But again it might not.
iwheela

Are you offering asking price or below?