While short sales have existed for years, they only entered the consciousness of most American homebuyers during the last several years.
In general, a home is a short sale if the net proceeds from a sale are less than the amount of the loan owed to the bank. Homeowners who would owe thousands of dollars even after a sale can request a short sale from the bank and avoid some of the repercussions of a foreclosure.
Don’t assume that a short sale is simply a nice house with a troubled financial past. Rather, learn as much as you can about the property, including when it was built, how many owners it has had and whether it has experienced problems such as a lack of maintenance. Short sellers must complete a disclosure form that should be educational, but bear in mind that intensive maintenance might have been lacking for areas of the home such as the roof and heating and cooling units. Any offer that’s made should be contingent upon a home inspection.
Be aware that buying a short sale might take more time than buying other homes on the market. That’s due in great part because banks must approve any offers made on a short-sale property and are involved in all sale negotiations.
Because of the complexity of short sale transactions, it’s always a good idea to have a real estate agent on your side. This is one time you definitely don’t want to try and go it alone!