How to Choose the Best Offer on Your Short Sale

by |

The expression “Cash is king” is often heard throughout the real estate community. But, when it comes to short sales, is cash really king? Does the bank actually care whether the offer is a cash one? Isn’t any purchase a cash purchase at the end of the day?

While it has always been true that cash is king, in the distressed property market it is vital for listing agents (and selling agents and buyers and sellers) to consider the fact that the highest offer isn’t always the best one and cash may not be king.

The Highest Offer May Not Be the Best One

In simple terms, when evaluating offers on a short sale, the highest offer may seem great, but there may be terms and conditions that are not in the best interest of the seller. For example, will the buyer with the highest offer agree to all of the necessary terms and conditions that may come from the bank? Will this buyer agree to pay for pest control if the bank refuses to do so? Will this buyer agree to wait three months for a short sale approval letter?

Now, with regard to short sales, the offer that is the best is clearly from a buyer who is serious, who is willing to stick around, and who is willing to accept any changes to the terms and conditions that have been dictated by the bank.

Finding the Buyer to Stick through the Short Sale Process

A buyer that is willing to stick around for the long haul is probably the best buyer of a short sale.  Bank employees do not care a lick that the cash buyer can close in two weeks; they still take their sweet time to process the short sale despite the fact that this inefficiency is causing them to bleed money right and left. Keep in mind that buyers that are willing to agree to terms and conditions that may change at the eleventh hour are better, stronger buyers than those who will march when the bank refuses to pay closing costs or termite repairs.

The cash buyer is great for the short sale because he or she does not need to worry about lender approval of the HOA or an appraisal that comes in sub par. But, will this buyer be willing to come up to the purchase price that the bank is looking for on their short sale? Aaah. That’s a good question. Lately it seems that the bank thinks all short sales are mansions made of gold, platinum and diamonds–instead of the diamonds in the rough that short sales really are.

Photo: flickr creative commons by stevendepolo

About Author

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®. Before landing real estate, she had careers in education and publishing. Many folks say that Melissa is genetically pre-disposed to success with short sales. In fact, last year she and her staff obtained over 500 short sale approval letters! When she isn’t speaking with lien holders, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.


  1. John Evan Miller on

    Cash is definitely great; however, I do agree with this quote from this article, “the offer that is the best is clearly from a buyer who is serious, who is willing to stick around, and who is willing to accept any changes to the terms and conditions that have been dictated by the bank.” At the end of the day, the buyer that is not going to bail if things change is definitely the better option.

  2. Melissa – This is an excellent article and EVERYONE is a cash buyer, their contingencies just might vary, but what buyer doesn’t have some type of contingency? Not to long ago I did a report on how cash buyers were actually paying more for their homes over financed buyers.

  3. People are too shy against power of institutions as banks. I plan to purchase a short sale and it will be a cash offer. I will put in the contract that I give 10 business days to accept or reject my offer and if time pass I will get back my earnest money ( my real estate agent will have to initial that and He is not happy).
    I will also specify that upon acceptance of my offer I will give 4 weeks to close and if it is not done on time I will have the right to consider the deal over and to walk away and to get my earnest money back.
    Doing that I can still look for houses but I will have to wait the time I have given to the bank has expired before making another offer.

  4. Thought I would chime in for August 2012 in SO CA
    OK, the evil ptb have turned this bubblicious post
    bubble around again, with the inventory contraction
    for various reasons, low interest rates, dumb first buyers,
    and so forth. So, we now have no inventory and a micro
    bubble. And don’t forget Jan 1, 2012 Ca Homeowner Bill Of
    Rights.It is my belief short sales and REOs with cease.

    We are a cash & close as well. We shortened our times and have
    put in writing we will stick around and want the home. We foresee only
    structual issues beyond a reasonable repair bill. (This home has issues, how bad
    is the question.)
    For those of us in it for the long run, it’s a waiting game. We heard, since this is a second
    time around, the CMA/BPO/Appraisal is already done. We are waiting for our highest and best round. Oh joy…. I am going to be a skinny minny with all this stress. LOL

Leave A Reply

Pair a profile with your post!

Create a Free Account


Log In Here