There are some very important questions to ask:
1. How many loans are on the property?
2. Are the loans backed by FNMA or Freddie, or are they treasury loans?
3. Are any of the subordinate liens HELOCs?
4. Is there an HOA? If so, are the dues in arrears?
5. Is the short sale approved?
6. Which banks are involved?
7. Has the short sale process already been initiated with the lien holders?
These are just a few of the questions to ask BEFORE submitting an offer on a property. The answers will help you to determine if the short sale is a viable transaction.
Short sales can often be obtained for less than market value, which is fantastic, but buyers frequently find themselves responsible for payment of past HOA dues, portions of property liens and various legal fees in order to close escrow. The wait for an approval can be as little as a few weeks, or as long as several months. In virtually every case, the property is sold as-is with no repairs offered.
The bottom line: you need to know exactly what you're getting into when you make an offer on a short sale, and you have to be patient. If you have an experienced short sale agent on your team, he/she will review the perks and pitfalls with you, and manage your expectations before you ever step foot into a short sale listing. Buying your dream home doesn't have to be a nightmare!