How to Create a Short Sale Offer Letter

Short sales can help first-time buyers afford a home.

Short sales can help first-time buyers afford a home.

If you are looking for a way to buy your first home at an affordable price, try bidding on a short sale. Short sales occur when a homeowner falls behind on his mortgage and would rather get rid of the property than take the chance of losing the home through foreclosure. The lender may approve the short sale and take an immediate loss to avoid the time and effort of foreclosing on the property. Because the seller and lender must both accept your offer, short sales can take several months to complete.

Print the date of the letter at the top. Move down the page and list the address of the property. Drop down another line and list the name and address of the seller. List the lender's name, address and the client ID or loan number for the property, if applicable.

Look up recent sales in the same area to compare the prices. Use these prices to decide on your offer price. Because this is a short sale, the bank may be willing to let go of the property at a loss. Start with an offer price that is five to 10 percent less than the market value and adjust your price based on the strength of the real estate market in your area. If homes are selling well, the bank may hold out for a better offer.

Discuss the condition of the property in your short sale letter. Most short sale homes are sold in "as-is" condition without a warranty because the seller cannot afford repairs. The bank is already taking a loss on the property and will not be willing to invest more money into repairing the property.

Mention any means of financing available to you. If you will be taking out a new loan to purchase the property, try to get a preapproval letter for the amount of your offer price. The bank will be more likely to approve your offer over another buyer who may not have the ability to pay.

List any concessions you are willing to make, such as a higher down payment or an offer to pay the seller's share of the closing costs. This can make your offer more attractive than those made by the other bidders.

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