What is the procedure in making a offer on property that is in short sale?
Actually, most if not all of the work negotiating the short sale procedure is handled by the Realtor who has the listing or the homeowner that requested one from the bank. If they did their job correctly,( I mention it because some agents and homeowners do not approach the bank until AFTER you put in the offer which increases the time frame and the likelihood you will get it at this listed price, most likely the bank will automatically increase the price, so this is important to know prior to making the offer).
If the agent or homeowner HAS approached the bank about it AND submitted the short sale package, then the only you need to do is place the offer. So always ask or look to see if there is any mention of bank contact in the advertisement or the MLS listing you are reviewing as this could increase your sucess and reduce frustration.
The first thing I would say is pick a realtor that is experienced in dealing with short sales. So often realtors today say they have experience in these transactions but honestly don't.
A short sale is a different animal and needs attention to detail. What is happening here is the seller is trying to sell the home for less than what the owe. So in terms of the offer, it is similar to any offer you may make on a home. Not much difference there. But what has to happen is once the offer is made someone needs to negotiate the sale price with the sellers bank.
Typically their must be some kind of hardship or reason they must sell. This is often the most challenging part, getting the bank to work with you. They will often send out their own 3rd party to get an assessment of value often refered to as a BPO (Broker Price Opinion) and will then run thru certain calculations to make sure the short sale makes sense for them. If they could foreclose and get a better return they will do that. In my experience if your short sale offer is over 75-80% of the actual value today than you have a pretty good shot of getting it approved.
Back to the negotiation that can happen from your realtor or the listing agent. But this must be happening and follow-up needs to be done to get the short sale offer excepted. Do your homework and don't try and get something for nothing because odds are you will be just wasting you time and the bank won't even consider your offer. Pick an agent that has experience here and you should be fine!
I hope that helps!