The #1 Mistake Investors Make When Submitting Short Sale Offers

If you’re an investor looking to land profitable short sale deals, you’ve probably heard your share of horror stories. Deals that took months longer than expected, banks rejecting offers outright, or worse—the seller walking away halfway through.

What most investors don’t realize is that nearly every short sale pitfall can be traced back to two critical mistakes: not properly educating the seller about the short sale process upfront, and failing to accurately check comps before setting their offer price.

Mistake #1: Not Educating the Seller

Short sales aren’t like regular real estate transactions. They’re lengthy, complicated, and require sellers to be deeply involved throughout the process. The biggest misstep investors make is not clearly explaining to the seller exactly what’s involved from start to finish.

When an investor doesn’t set expectations early, the seller may feel blindsided by the constant document requests, long wait times, and overall uncertainty. That’s when they start checking out, stop responding, or even walk away entirely.

What to cover when you educate the seller:

- What a short sale involves and why it can benefit them

- The realistic timeline from listing to approval

- The financial documentation they’ll need to provide

- Why their active participation is essential for approval

If that sounds like a lot for a seller to handle, it is—but you don’t have to go it alone. Our team Crisp Short Sales haatndles the entire process, including seller education and full coordination with the lender.

Mistake #2: Not Checking Comps Correctly Before Setting Your Offer

Many investors use the ARV model—working backwards from the future value after renovation. But short sales don’t work that way. Banks don’t approve based on what the house could be worth—the value is what the house is worth right now.

The lender orders an appraisal or BPO to determine the home's value in its current, as-is condition. Your offer needs to reflect that number—not a number based on a future flip.

Here’s how to avoid this mistake:

- Check recent comps for homes in similar condition

- Base your offer on what the home will likely appraise for today

- Share this research with the appraiser or negotiator when possible

This simple shift in thinking can help you land stronger deals and speed up approvals.

Final Thoughts: Set Up to Win

To consistently succeed with short sales, focus on education and preparation. Set expectations with your seller early. Base your numbers on reality—not on ARV. And if you want a team that handles all the back-and-forth with the bank and seller, we’re here to help.

Want help closing your next short sale deal faster and with less friction? Start a file with us today.