Short Sale Differences – Due Diligence Period

In a “normal” or traditional real estate purchase, the due diligence period would start immediately upon buyer and seller reaching a binding agreement.  With a short sale, this is not usually the case.  From the Buyer’s perspective, we don’t want our Buyers to have to pay money out of pocket on inspections before we know if the bank is going to approve the sale or not.  So generally speaking, we try to negotiate into the contract that the due diligence period will not start until we have written short sale approval from the Seller’s Lender(s).  That being said, we have to be ready when that approval does come to get our inspections done quickly.