Once my clients finally decided to purchase another home (we tried for over a yr to finance the first home), their lending options greatly expanded, and we closed on their home about 4 months ago....
Though it's possible to find a lending source to handle your transaction, you're fighting an uphill battle here.....
1. You and the seller should have separate Realtors experienced in Short Sales. Check their records if possible.
2. Be aware that the sale may not be able to go through because of your pre-existing relationship with the seller.
3. Make sure to do a home inspection, pest inspection, etc. Know about the structural integrity of the home.
3. Find out the proposed auction date (if there is one) and keep it on your calendar. Know that the home could go to auction while your in negotiations. Your Realtor can help with this issue.
The property can still go to County Auction even if it is currently listed as a Short Sale. Your landlord may try and negociate on his or her own with the bank and depending on the terms they are able to get in palce you may over pay for the home.
Get a buyers agent invovled who has proof they have closed multiple Short Sale transactions (Metrolist Print Out or closed Files available in their broker of records office) within the past 24months. There are more things to worry about being the SELLER on a SHort Sale then a BUYER but that does not mean as the buyer you have no worries. Use a professional whenever possible...
Keller Williams World Media Center
Short sales do take up a good amount of time and your patience is needed.
Many banks will also want you to verify that you do not have a relationship with the current owner.
Step 1: Find a knowledgable Realtor
Step 2: Get Pre-approved
Step 3: Make your offer
Step 4: Patience is needed while you wait for bank approval.
Good luck to you!
Keller Williams Realty