Foreclosures: Tips and Techniques Before Purchasing a Short Sale Property

Purchasing a Short Sale Property

Short sale, in real estate, means marketing a property lower than the pending mortgage on it. It usually occurs when the property value drops and sellers don’t get money from a certain buyer to liquidate their existing mortgages.

Some buyers engage in short sales to be able to receive a great deal because they genuinely believe that purchasing a short sale can give this opportunity. Thus, when you happen to see a price listed for a specific property, ask your agent first to know if the property is a short sale.

You may want to reconsider making a bid on a pre-foreclosure, short sale property. For a little help, listed below are tips and techniques before you even buy a short sale property.

Get a Real Estate Agent with Short Sale Background

The worst thing that you can do is to hire an agent who has never had an experience with short sale properties. Avoid going through that situation where both of you are completely blind about this field.

With that said, you must hire a knowledgeable agent who can deal with surprises and prevent any problems from occurring. A real estate agent with a considerable amount of expertise and experience in short sales will certainly guide you to quicken your transaction and take care of your interests.

Of course, you do not want to miss out any critical details because of inexperience or learn that your business dealing will not be going to close on time because nobody cared to follow it up. You can hire experienced agents in many real estate firms like Rose And Jones.

Read also:  Tradegbd Has Forex Trading Market Ready in Hand

Know the Possible Repercussion of Short Sale

Some sellers are very agitated to dish out their respective mortgage payments. However, they do not usually consider the possible repercussions after the sale. Maybe months or years later, they can get a collection letter for the dissimilarity between the amount of the property sold and the pending mortgage.

Without a doubt, laws differ by state, but some states let lenders “chase” the sellers to get that balance after the short sale is complete. That is why it is very important for borrowers to know if the lender settles to forgo the balance or the deficiency left on the mortgage after the sale.

To avoid dire situations like the one mentioned above, make sure to have the short sale through the HAFA or Home Affordable Foreclosure Alternatives program. Those lenders who authorize short sales through this program have to free the borrower from the possible deficiency judgment.

However, it is not a necessity for the lenders to agree with this federal program. They are free to make a short sale from their guidelines and rules decided by the loan investors. With that said, it depends on the lender if he/she will continue the balance against the borrower.

Examine the Public Documents

It is of the utmost importance to do your fact-finding before buying a short sale property. Your hired real estate agent can certainly determine whose name is on the title, in case there is already a foreclosure note registered and the amount of money owed to the lenders. By doing so, you can easily decide how much money to offer.

Read also:  Forming the Crux of Supply Chain Operations: Business Intelligence in Action Delving into BI and What it Means for Supply Chains Today

Preparing the Seller and Property for a Short Sale

For sure, a lender will not likely approve a short sale if the seller is incapable of compensating the difference between the pending loans and sales price and has no equity. As such, sellers must see to it that they can present a financial hardship letter addressed to the lenders.

Get the Right to Run Inspections

In most cases, the lender will not authorize a seller to compensate for common items that an accustomed seller would pay off. These comprise of home insurance system for the buyer, pest and termite inspections. However, buyers will have to buy the property without any restoration.

Thus, it is very crucial that a buyer reserve the right for a home inspection. Buyers deserve the right to a home warranty plan to have a peace of mind and mental freedom about what can potentially malfunction in their new property.


If you see a short sale property that you think is within reach, don’t get too excited. Before you even decide to buy a short sale property, you must know some tips and strategies to avoid any future complications.

As stated above, first you need to hire an experienced short sale agent, then learn the possible consequences after the sale, study the public records, prepare the seller and the property for the short sale. And lastly, you need to have the right to run home inspections.

Related Post

How to evaluate a customs broker to facilitate cus... With the recent signing of the Comprehensive Economic & Trade Agreement (CETA) between Canada and the European Union, businesses on both sides of the Atlantic will be looking to take advantage of new cost savings and to explore new markets. If you’re one of those businesses, you probably alre...
Tradegbd Has Forex Trading Market Ready in Hand is a website which you can use in the Forex trading market. This service is a decentralized market for trading currency all around the world. You can deposit and receive payments in all different types of currencies with high security always at work making sure your processes are ac...
10 Tips to Starting a Great Blog Having a blog nowadays is a truly extraordinary approach to upgrading your web content consistently. It's anything but difficult to begin. Make sure that you set aside the opportunity to assemble an arrangement to guarantee that your blog is not a jumble of thoughts and considerations. Choose w...
Forex Broker FX The fXtrade777 is a brokerage firm that is committed to providing world class online trading services to its clients. The fxtrade777 has professional staffs who have specialized in industry expertise, customer services, and innovative platforms, where their customers are both the commercial sector a...
Increasing Productivity through Product Engineerin... The entire manufacturing ecosystem is going through a metamorphosis, due to customers making tailor-made demands.  There is a host of new activities which needs to be incorporated into the manufacturing environment, to cater to the sophistication of demands from each and every buyer. To stay ahead i...

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.