More about Short Sales
The first step in the process of making an offer for a short sale should be for your buyer's agent to make informal contact with the listing agent for the property. You will want to know, for example, if any other offers have already been made for the home, and whether the lender is still considering additional offers.
This will help you to decide what offer price to put on the contract. If it is clear that there is going to be a multiple offer situation, then your strategy will need to be different than if you are the only bidder for the home.
Don't assume that because the market is weak you will be the only potential buyer. You'd be amazed at how competitive it can get when an exeptionally low-priced home on a popular community comes onto the market. You may sometimes need to put in a bid substantially higher than the listing price in order to beat out the opposition and get your offer accepted.
When you have assessed the situation the next step is to put in a formal written offer, accompanied by a proof of funds document if you are a cash buyer, or a pre-approval letter if you will be financing the purchase. A verbal offer will not be considered in the case of a distressed sale. You will have to make a firm commitment right from the start.
Then comes the wait! Optimistically, in the best circumstances, you may get a response to your offer within a week. The possible responses will be the same as for a regular offer, the lender can accept your offer, he can reject it, or can come back with a counter-offer.
In the majority of short sale offers the wait will be a lot longer, even where the lender is already involved in the process. If your bid is a good one from the lender's point of view, and the bank suspects that they won't get anything better, they may accept your bid quickly. If they think they can do better they will sit on your contract for weeks in the hope that a better offer turns up.
So can you move on if you are tired of waiting and feel you are missing out on other bargains while you are in limbo? Legally, the answer may be no if your contract is still within the timescale you have set. In practice, though, there is unlikely to be any financial risk to just walking away if you haven't been required to put your initial deposit into escrow.
Distressed sales - acceptance to closing