How to Buy a Short Sale Home

Short sale homes can be great deals in this market. You can normally purchase a short sale home for much less than it's present value. The only draw back to purchasing a home that is in short sale status is that it's complicated and confusing for most individuals. Here is a quick, no frills guide on how to buy a short sale home.

Difficulty: Challenging

Instructions

Things You'll Need:

• A Realtor
• Patience

1. First, and most importantly you'll need to find a Realtor that specializes in short sales. Make sure that your agent has the correct short sale education so that they know how to expedite what is a lengthy and tedious process.

2. Your Realtor will have access to your local MLS (or multiple listing service). Most areas will have a section to indicate whether or not a particular property is a potential short sale. Your agent can pull those listings and you can preview them based on that data.

3. The next step can be the most complicated. Different rules apply to short sales dependent upon whether they are a FHA, VA or Fannie/Freddie mortgage. Your Realtor will be educated on the differences for each and will explain these to you in detail.

4. The next step is to prepare the purchase agreement along with a short sale addendum. The purchase agreement needs to be completed according to the short sale guidelines and lender specifications. Each lender is different in their requirements and it's good to know who requires what.

5. Once completed the listing agent will submit your offer to the bank. The bank can (and normally does) take 60 days before they provide you with an acceptance of the offer or a counter offer. The bank is only interested in getting the highest and best offer for a property, so don't anticipate being awarded seller concessions for things like title policies, survey's or closing cost assistance on a short sale.

6. If the offer is accepted, closing on the home can take an additional 60 days, as you have to wait to be assigned to a mandated mediator from the lender. While this might seem like a long time, remember that you are gaining thousands of dollars in escrow during this process. Be patient and you will soon get the keys.

Tips & Warnings

• Ask your agent questions prior to hiring them to represent you in a short sale. If you'd like a free list of questions that you should ask your agent, please contact me.
• Be prepared to fax or email things several times to the bank.

Resources

• Your Texas Realtor

[starlet67]

on 6/25/2009 Great info on buying short sale homes!

[1citygirl]

on 2/23/2009 A great, simple easy to understand article. Thanks!

[cadosh]

on 2/22/2009 Great article! Thank you for writing!