The short sale is a term used for a home that is in pre-foreclosure where the current owner is wanting to sell it before the bank forecloses, and the bank is willing to accept less than what is owed in order to save the costs of having the property in their inventory, property repairs & upkeep, attorney fees, and other fees they face if they foreclose. Even though a bank is losing money by selling the property for less than what they are owed, in most cases if they foreclose they will still receive less than they are owed, making a shortsale a better choice for them.

For the buyer there are several things to keep in mind. The bank (in almost all cases) will not make repairs to the property, they also will not (in almost all cases) help the buyer with their closing costs. The bank is looking for a pre-approved buyer that they aren't going to have to worry about not being able to close on the property at the last minute. Someone looking to buy a short sale property needs to have a pre-approval letter ready before making an offer. They also need to be aware that it is very common to take up 3 or 4 months to close on a shortsale property just because of the process it goes through along with the number of them being done in our market right now. When you make an offer on a property if you ask what lender has the current mortgage you can sometimes gauge how long the closing will take. If it's Chase or Countrywide you're probably looking at up to 6 months. If it's most of the other nationwide companies you can expect around 3-4 months. If it's a smaller more local company like BOK you could be looking around 30-45 days.

That's probably more information than you were looking for, but in short if you buy a short sale property it won't affect your credit or credit cards, and as a buyer other than the length of time to close the process is identical to buying a "regular" home.

The term "short" has to do with a home selling for less (short) than the bank is owed on the property. So, if the Seller has a $100,000 mortgage from the Bank, and the home is sold for $80,000, than it is "Short" $20,000. It has no relation to the Buyer.

A short sale is when a home is sold for less than what is owed on the property. When an offer is submitted, the seller has to first approve of the offer and it is then passed on to the bank who will make the final decision as to whether or not it will be accepted. It is important for the seller to approve of the amount because there is a possibility that he/she will be taxed on the difference of the sales price & what they owed on the property. There is potential to get a good deal on a house through a short sale, however, you cannot be in a rush to purchase a home with this process as it can easily be a couple of months before you receive a response from the bank. Hope this helps! I would be more than happy to help you with any further questions.