Short-sale homes are homes that in danger of being foreclosed on, and are also known as a distressed properties. These homeowners have dealt with a major life change, and are no longer financially able to sustain their mortgage. They have applied for an agreement with their lender to sell their home for less than what they owe to ultimately avoid foreclosure. Short-sale properties are undoubtedly a good deal, however, it's important to know if a home is approved for short sale, or if it is pending approval for a short sale, as this could make a crucial difference to your purchasing decision.
Things You'll Need
- Lender approval
Find a home that is being advertised as a short sale. Most real estate agents will advertise this prominently along with the price of the property that is a short sale. To locate these properties most easily, search for the words "short sale" using the resources below. Make a list of homes you are interested in.
Talk to a licensed real estate professional that does not work for the seller of the home advertised. This is crucial, as the agent representing the seller or advertising the home is not obligated to disclose anything to you since they are working only for the seller's interests. To find a reputable Realtor and review their resume, visit the resources below.
Have your selected Realtor contact the agent who has the listing for the property advertised as a short sale. They should be able to discern whether the property is approved for short sale with the lender, or if it is still pending approval. Short-sale approvals can take up to 60 days to come back from a bank, however, aggressive agents will advertise a short sale prior to approval. Making an offer on a home not yet approved means very little, as it could be foreclosed on.
Have your Realtor contact the lender who is working with the seller. They will speak to the loss-mitigation department to verify that the home has been approved for short sale. At that point, they will also receive instructions on how to complete an offer that the bank will accept for the property.
Verify the short-sale approval or pending approval, and then submit an offer on a property. This is the best way to secure a home in the short sale process. Expect to wait 30 to 60 days to receive an answer from the bank on any short-sale bid.