When a house is on the market and it’s worth less than what’s owed on the mortgage, you’re likely to see it sold as a

“short sale”. Short sales are a part of the real estate environment right now, and they’re not as easy to buy as you might

think. Here’s how to buy one.

Reprinted from http://www.nrvliving.com/2010/02/02/how-to-buy-a-short-sale/

How To Buy A Short Sale

By Jeremy Hart, NRVLiving.com and Coldwell Banker Townside, Realtors Blacksburg, VA

Last week I talked about having a short sale right down

the street from an upcoming listing.  It’s not the greatest

deal in the world, to have a house just steps away that’s

being sold for less than what is owed on it, but it is what

it is.  My sellers are realistic, they’ve got a house that’ll be

priced right and will show great, and we’ll continue on.

One of the emails I received over the weekend asked, “Is

buying a short sale something you recommend?“.  Kristina, if you’re ready for an interesting experience, then

yes, buying a short sale here in the New River Valley is

something I recommend.  Three things:

1. Hard work is required. The bank has agreed to let

the borrower – in this case, the homeowner – sell

the house for less than it’s worth.  In all

likelihood, you’re not going to get the belle of the

ball.  The house is likely going to be in some state

of disrepair (I’m not suggesting all homeowners

who sell short do this, just suggesting that

sometimes you’ll need a little more than elbow

grease), and since the borrower has already shown

they have no money to make the payments,

they’re not likely to make any repairs, either.

2. Losing the deal will happen.  When your offer goes

to the bank for approval, it could very well be one

of several offers on the same property.  And the

bank will continue to accept offers until it makes

a decision.  Don’t be surprised if, while waiting for

a response from the bank, you learn that you’ve

lost out to another offer.  Your agent should

help you write as tight an offer as possible,

but when push comes to shove the banks

only care about the bottom dollar.  You WILL

lose a short sale from time to time … the key

is to lose as few as possible.

3. Hope you’re not in a hurry. I thought about

writing this point first, but saving it for last

seemed more appropriate since we’re not in

a hurry.  And I hope you aren’t, either,

because buying a short sale will take time.  There’s no sitting down at the kitchen table

and presenting an offer when it comes to a

short sale – the offer is agreed upon the

seller and THEN it’s submitted to an

overworked “specialist” who reviews and

approves everything.  Since this specialist is

working on who knows how many hundreds

of other files at the same time, it could sit

for quite a while.  If you don’t have the time

to wait, don’t – and if you do, I hope you’re

patient.  Honey can cure a lot of troubles,

but it’s not guaranteed when dealing with a

short sale.

I’m sure I’m not the first to repeat this to their

clients, but I constantly remind my clients that one

of the greatest strengths of a good agent is their

ability to be an unemotional facilitator in the

transaction.  When it comes to short sales, both the

homeowner selling the home, and the buyer trying

to buy the home, need to ratchet up their ability to

be unemotional, as well.  It’ll take time, and it might

Jeremy Hart a licensed real estate agent at Coldwell Banker Townside Realtors in Blacksburg, Virginia, and founding member of NRVLiving Real

Estate.  If interested, his license number is #0225077937, and he’s been a licensee in good standing of the New River Valley Association, the Virginia

Association, and the National Association of Realtors since January 2004.  You can contact him at jeremy at nrvliving dot com. 

Disclaimer: I’m just a real estate agent and while I’m one piece of the puzzle, don’t forget to consult your attorney, tax professional and librarian

before making a financial or real estate decision. It should be noted that the articles in this blog are solely my opinion, and likewise those who leave

comments are providing their opinions, as well..  These are not the opinions of Coldwell Banker Townside Realtors, their affiliates or any employee

thereof.  Coldwell Banker Townside has been gracious in allowing me the freedom to discuss real estate in whatever way I choose, but they are not

responsible for the content included herein.  Any information or statistics I post are deemed accurate, but are not guaranteed.  I will also not sell or

release your email address to anyone unless ordered to do so by a court of law.  I won’t contact you unless you contact me first.  Finally, all content

is protected by Creative Commons and US Copyright.  If you like something you read here, feel free to use and quote small portions of text as long as

you link directly back to the post URL.  Please do not republish without permission – my attorneys fees are expensive.

be ugly at times, but if you’ve got the patience you can buy a short sale.

Updated 2/2/10 2:10pm – Danilo Bogdanovic just posted a good addition to this post, entitled “How Long Do Short Sales

Take?“.  If anyone would know it’d be an agent in the 51st state, Northern Virginia.