A short sale prevents foreclosure as it makes the lender agree to take less of what is originally owed to them by the distressed homeowner.

Having a short sale does not only help the homeowner facing foreclosure, but it can also offer a great deal for a home buyer. Since the house is being sold for an amount less than what is owed, it is definitely a bargain. Also the house you can buy is not the worn-out type.

Here are some helpful tips to land a good deal on a short sale:

  1. Know where you are putting yourself into. Here, you are dealing with the distressed homeowner, the lender, and their agents. This means the process can take about 2 to 6 months, unlike a typical sale with about only 30 days. So before buying such a property, have a budget for apartment rental for several months.
  2. Fin the right expert. Do not go solo. Find an agent who is more experienced or who has closed several deals already.
  3. Eliminate candidates. It takes more time to negotiate houses with more than one lender. Also, avoid those homes with a seller that has other offers. It is again, time consuming.
  4. Set a good price. Let your agent submit your price offer to the seller. Have your agent identify that home’s fair market value by searching for comparable sales within the area. If it is lower than the list price, make an offer that is 10% lower than that.
  5. Be safe. Know if the lender will cover the charges. Do not make an appraisal of the property until the offer is approved.
  6. Do not put a deposit more than $3,000 before your bid gets accepted.
  7. Keep in touch to make sure your offer is being processed.
  8. Watch the market.

With your short sale purchase, there is definitely no more foreclosure for the troubled borrower.