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How to Buy a Short Sale

Over the past few years, the real estate market has seen a multitude of properties selling as a short sale. While many markets are finally seeing a reduction in these distressed properties, they are still around and affect the homeowner as well as the potential buyers.

Simply stated, a short sale means that the lienholder on a property accepts payment that is less than is owed… In other words, it’s “short.” The lienholder would be the lender or lenders. If home has a first and second loan, then both lenders (lien holders) would have to accept the terms.

The process is relatively simple:

  • The listing agent notifies the lien holder(s) of the intention to sell as a short sale
  • A buyer’s offer is accepted by the seller
  • The seller completes a full short sale package and submits to the lien holder(s)
    • Buyer’s offer
    • Seller statements of financial distress/hardship
    • Seller’s complete financial statements
  • The lien holder(s) order a Broker Price Opinion (BPO) which is an approved real estate broker’s opinion of the market value of the property.
  • Once approved by current lien holders, then the sale concludes as normal. (Buyer obtains loan, appraisal, inspections, etc.).

Buying or selling a short sale property takes a little longer, but there are benefits and it is a far less difficult than it used to be and if the property is right, nothing to run from

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Our agents write often to give you the latest insights on owning a home or property in the local area.

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