A Short Sale is a pre-foreclosed property that the bank has agreed to negotiate rather than foreclosing.  They want the seller/owner to continue living in the property and maintaining the property.  They do not want to chance the property being vandalized or abandoned.

Why do a short sale?  Most sellers consider a short sale when they know they are headed to a foreclosure but don't want a foreclosure on their credit history.  A short sale is easier to get over and if this is your primary residence you should have a smaller tax repercussion by doing a short sale.

As a buyer, you can purchase at a very good price.  With a good price comes some risk. 1) There are no warranties. 2) There are no guarantees 3) You must do your due diligence and you will have no recourse against the seller should you get a property with undisclosed problems. (This seller is almost at foreclosure, they do not have the money to pay their bills...no resources.)

To buy a short sale:

1) Find a good inspector.  You need them to look at the property and make sure you know what you are doing. 

2) Find someone who does repairs, a residential contractor can usually take on these items.  Get their estimate before you go on.

3) Find a good attorney.  You will need to make sure there is just one mortgage...the more mortgages the less likely a short sale will work.  If you find more than 2 mortgages...keep things together, you will be able to purchase it at the foreclosure sale.

4) Have time and patience.  Short sales are done on the bank's schedule, not yours or your agents.  You have to give yourself at least 45 days for closing...some go over a year.

5) Contract the property at a good price.  Banks are not doing fire sales.  You cannot buy for 50% of retail.  You can save money, but usually even with a new construction, you are looking at having to spend money before you can live in the property.  Banks will give some concessions:  if you ask for closing costs or appliances...don't ask for both.  The higher your offer the more likely you are to get concessions.  It all goes back to the bottom line for the bank.

29% of all homes sold in South Carolina last year were short sales.  They are becoming the norm.  A good agent can help you find and buy one.  Follow their lead and you will make a good decision.

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