The answer is you have instant equity in the home if your offer is accepted and the appraisal comes in higher. However the bank does not have to accept your offer on a short sale and getting an offer accepted can take up to 6mths. More than likely they already have and appraisal and they usually have done their own BPO as well which is a broker priced opinion. Which is really where they hire another agent to do a mini appraisal of what they think the property is worth. The bank is already taking a loss on the loan by doing the short sale. But what they want is at least something close to fair market value. So even if the homeowner accepts your offer if the value is significantly higher from your offer they do not have to accept the offer. Hope this helps usually the problem is if the value is not there as compared to what you did offer.
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