what is a short sale

What Is A Short Sale?

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What are you going to do if you lose your job and can’t pay your mortgage?

If you’re having trouble paying your mortgage, or you’re foreseeing a time when you won’t have the money to, you may have come across the idea of a “short sale.”

You may also be familiar with short sales if you’re on the other end, exploring ideas for purchasing a house at an exceptional price.

The word is thrown around a lot, but you’re probably still asking yourself, “What is a short sale?”

What is a Short Sale?

Let’s say, for example, that Brenda gets a mortgage on a $350,000 house. Life is great, she pays her mortgage, everyone is happy.

Then she loses her job.

Now, unable to pay her mortgage, she gets an appraisal to see what her home is worth.

The appraiser lets her know that her neighborhood value has dipped, making her house worth only $275,000. Brenda still has $325,000 left to pay on her mortgage, and she needs to figure out a way to cover the remaining $50,000.

Selling the home for its new market value, with the permission of the lender, can often be enough for lenders to waive the remaining value of a mortgage.

Lenders must be involved

Brenda needs to give her lender a package of financial information, as well as an explanation of her financial need. If the lender grants Brenda the option of “short selling” her house, there is a good chance that the lender will consider the mortgage fully paid.

Brenda saves $50,000.

The lender, usually the homeowner’s bank, could lose a lot of money in this situation, so it’s difficult to get them to accept an appeal.

In most situations, the lender will accept the terms to avoid dealing with a costly foreclosure. This doesn’t mean that they will always accept.

There are pros and cons for buyers and sellers in this situation, so it’s important to have a good idea what you’re getting into.

“What is a short sale going to do for me?” – To answer this question, you’ll need to consider the following factors:

If You’re Selling

When you find yourself in the unfortunate situation of needing to sell your home, a short sale is a good thing to consider. That being said, it isn’t always a good idea.

What could you gain?

1. Money

There is the obvious perk that, if approved by the lender, you could save tens of thousands of dollars. If you are able to agree with your lender upon a mutually beneficial deal, a short sale might the best thing to pursue.

2. Avoid foreclosure

At the very least, you retain a level of control in a short sale.

You are avoiding eviction and suffering heavy blows to your credit, you also show that you were proactive and aware of the situation before it reached the point of foreclosure.

What could you lose?

1. You may have to pay the difference

There’s a decent chance that your lender won’t accept the terms, and require that you pay the full difference on the mortgage.

2. You will invest time and money in the process

In order to go through with a short sale, you’ll need to hire listing agents, seek buyers, negotiate prices, and wait an excruciating length of time for lenders to respond to your requests.

That means time and precious money will be wasted if the lender doesn’t give you the option of a short sale.

3. Your credit will suffer

The degree to which your credit score is affected depends on the situation, but short sales have the potential to affect your credit as badly as a foreclosure does.

That being said, a short sale looks better if you plan to purchase another home in the future.

If You’re Buying

1. You score on a house

The fact is, the seller has no option but to sell their house. If you understand how short sales work, you’ll be able to estimate just how much leverage you have as a buyer, and likely save a lot of money.

2. It may be a great investment

If you end up getting a good deal, odds are you’ll be able to flip the house and make a profit, or live in a house that you normally wouldn’t be able to afford.

The worth of your investment will depend on why the house lost value in the first place, as well as other market factors that you should be aware of.

What could you lose?

1. It could be a bad investment

Who knows why the value of the home decreased? It may seem like a steal, but the property value could be on the decline anyway. You could end up putting a lot of time and effort into something that loses you a lot of money.

2. You might pay too much

You may end up paying more than the house is worth; lenders will work the seller to the bone to get them to pay the full mortgage. If you pay the full price of the mortgage, you’ll be paying more than the home is worth.

3. The price might not be real

The home may be listed as short sale, but the price could be entirely speculative – the lender may not have approved the terms. Sellers will often market the home at a price they have asked the lender to approve, meaning that the price listed may be totally up in the air.

If the lender hasn’t approved the sale, there is no way to know what the price will be. There’s also no way to know if the approval will go through, meaning that you’ll be risking a lot of time and effort on something that may not be real.

Do Your Research

Hopefully you can now answer the question, “What is a short sale?”

The information above is by no means exhaustive. There are plenty of insightful resources that offer extensive knowledge on both sides of the short sale.

If you’re thinking you want to be on the buyer’s end of a short sale, make sure you understand your end of the equation. Research the home’s area, the specifics of the home itself, and why the buyer is selling. Most importantly, make sure the lender has approved the sale.

If you’re selling, make sure a short sale is the smartest move for you. Consider refinancing, renting out your home, or exploring other alternatives before you jump in.

Start acting now. Ask yourself, “What is a short sale?” Make sure you can explain it to yourself before taking any major financial steps. Explore the ins and outs of short sales to see if you should enter into one.

facing foreclosure

Facing Foreclosure: How To Do A Short Sale To Prevent Foreclosure

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If you’re facing a foreclosure, your life is about to transform. But that transformation needn’t be your undoing. Learn how to short sell your properly to prevent the worst aspects of your loss.

Foreclosures don’t ruin lives. It’s the steps homeowners take before that do. If you’re facing foreclosure, acknowledge you have a lot to do in the short term.

You can prevent catastrophic losses to finances and credibility. A short sale is your saving grace to reducing the blow of foreclosure. But you need to learn the right steps to make your short sale succeed.

In this post, we’ll show you how to have a successful short sale so you can prevent foreclosure.

Here’s How a Short Sale Helps If You’re Facing Foreclosure

Foreclosures occur when mortgage payments have stopped. This can be due to financial struggles or abandonment. Your lender will file an NOD and soon after scheduling an auction for the property.

You have an opportunity to sell your home before that auction is scheduled. If you get a likely buyer, your lender is obligated to consider it. They might consider it an opportunity to avoid the hassle of reselling themselves.

This is called a short sale. A short sale is a sale in which a house is sold under market value. It’s a common way for homeowners and lenders to recoup financial losses when facing a foreclosure.

Getting a buyer relieves you of some of the financial damage of the transition. It protects you from the worst credit damage as well.

5 Steps to Completing a Successful Short Sale

You have a very short time span to sell when facing foreclosure. And buyers aren’t already knocking down your door. How can you turn things around when you’re new to this entirely?

There are a lot of moving parts to a short sale. You, the buyer, and the bank all have incentives to see it through. The following five steps will help you make it happen.

1. Notify Your Lender of Your Intentions

When a foreclosure is imminent, your lender will begin making plans to close and resell the property. Your loan documents will have specific details for the event of a foreclosure. Review your rights so you know what options and time you have for a short sale.

Not all properties qualify for a short sale. Your lender must agree to these terms before you can carry it out. You need to take action to this end, whether or not it seems possible.

You will need to work within those limits to sell your property. Remember, your lender has the incentive to see your property sold. No matter the terms, be sure to frame it this way when you speak.

If your lender ultimately agrees, they will be accepting less than the total amount you owe. They will be writing off those losses as a convenience against reselling the house. Maintaining homes is costly, and auctions themselves are unpredictable.

But for your lender to agree, you need a buyer. And securing a buyer is the real challenge.

Your next move at this stage is to submit a letter of authorization. This permits the lender to talk with relevant parties about your loan. This is a good way to invite future cooperation with your lender as you proceed.

Finally, submit a hardship letter. The sadder the letter, the better. It’s another tool to convince your lender to accept less than the value of your loan.

2. Contact an HUD-Approved Housing Counselor

The U.S. Department of Housing and Urban Development (HUD) provides free counseling for homeowners facing foreclosure. These professionals help you understand your rights and options.

Specifically, HUD counselors provide ‘foreclosure avoidance counseling.’ Your counselor will introduce a wide range of options available. They might even help you facilitate your short sale.

Your first step is to meet with the counselor and discuss your financial situation. You’ll address your personal finances before figuring out what options are best for you. Bring all of your government and financial information when you attend.

Avoid private foreclosure prevention companies. They seek to capitalize on your problem. They may offer some assistance, but eventually, they must be paid.

3. Prioritize Your Finances

Regardless of your decision, you need to free up cash. You may be facing fees in addition to arranging your short sale. Start by cutting spending on non-essential recurring services.

If you have other debts, consider deferments or forbearances. You will want to become more settled before you continue paying them off. Consider folding other rental properties and special memberships as well.

Finally, consider selling some assets. You will be moving soon, so take stock of valuable items in your home. This would be a good time to sell any unnecessary vehicles or leisure items as well.

Once you have your finances in line, you’ll want to show your lender. You will need to justify all unusual transactions in your accounts. Your lender won’t sympathize if you’ve recently bought something lavish.

It will help if your lender sees you’re tightening your belt. The lender will understand facing foreclosure is something you’re taking seriously.

4. Facilitate the Short Sale

Attracting a buyer isn’t easy. But you can work with your HUD counselor to adopt the best methods. You’re selling below market value, so you have that working for your form the start.

Advertising a short sale is easier than in the general market. That’s because, in the housing market, short sales are few and far between. Buyers looking broadly may jump on an opportunity to save money.

Start with simple signs with your phone number or email address. You can use public postings and affordable ads to market to buyers. Word of mouth works also – someone will know someone interested in a house.

If time has passed with no buyer, you must buy time with your lender. Create a comparative market analysis to show how market conditions are hurting your chances. Your lender will realize that universal problem and possibly give you more time.

5. What to Do After Your Short Sale

You might need to try a few offers before your lender agrees. When the lender does, you will have averted the worst possible outcome. You will be free of your financial obligation and ready to move forward.

You will still need to recover from the damages. The short sale process may have left you with less money and fewer possessions. You need to find a new home, but your credit score will be down.

Remember, a foreclosure is much worse. Hopefully, you have a fresh perspective on life. You’ve relieved yourself of a financial burden, and it’s time to move forward.

Learn More from Short Sale Blog

You’ve just learned what to do when facing foreclosure.

But do you know about the emotional fallout of a short sale? How about buying in a short sale and your financial future?

We’re ready to share more or hear some of your great ideas. Contact us and let’s start a conversation.

short sale or foreclosure

Short Sale Or Foreclosure: How Should You Sell Your Home?

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Are you a homeowner struggling to keep up with your mortgage payments?

If it has all become too much for you and you’re considering a short sale or foreclosure, we’re here to help.

In this article, we’ll give you the facts of both so you make the best decision for your situation. Read on to learn how.

What is Short Sale?

While sometimes there’s confusion between short sale or foreclosure, they’re quite different.

When you sell your house on short sale, you’re selling the house for less than what you owe on the mortgage. For example, if you still owe the bank $210,000 but decide to sell for $190,000, you would be selling your house on short sale.

Before you can begin with the short sale process, a few things need to happen. First, you need to get the bank or lender to sign off on the sale.

You will need to provide the bank with enough documentation explaining why you’re going through with a short sale.

Also, be aware that the process with be a lengthy one due to the amount of paperwork. Sometimes it could take up to a year to complete.

What is Foreclosure?

When your house goes into foreclosure, the bank or lender decides to part with the house after, as an owner, you stop making the payments.

While owners are the ones who initiate short sales, the bank or lender is the only one who can initiate the foreclosure process.

Since you’re not making the payments, the bank uses the house as collateral to get their money back in the investment.

Foreclosures either take place after the owner has left the house, or they get evicted once the process begins.

Pros and Cons of Short Sale

Before you consider going through with a short sale, you should weigh the pros and cons.

Pros

The first pro you should consider when selling your home short sale is you avoid foreclosure altogether. There’s a stigma around the word foreclosure that may leave homeowners feeling defeated.

If you consider this a pro, when you short sale your home, you get the satisfaction of knowing you avoided foreclosure.

You can get a real estate agent to take on the listing so you can move the house faster.

While the home goes through the short sale process, you don’t have to make mortgage payments unless you want to. This helps many homeowners repair their finances.

Also, according to the Fannie Mae guidelines, you could buy another house in 2 years instead of 5 to 7. And if you’re not 60 plus days late with your payments according to your credit report, you might be able to buy one right away.

Cons

Of course, short sales also have their shares of cons. For starters, your bank might not allow you to go through with the short sale.

Waiting for a response from the bank might take a really long time, and your finances might not be able to handle it. Not to mention, your credit score could take a serious hit.

It’s also possible your house will still go into foreclosure while you wait to hear back from the bank.

You will have to keep the house in excellent condition while you wait to sell it.

Pros and Cons of Foreclosure

When deciding between short sale or foreclosure, as attractive as short sale might seem, foreclosures are the best option for some homeowners.

Pros

When homeowners cannot wait the long short sale period, foreclosure is the best and immediate solution.

Since money is an issue, when you’re in the process of foreclosure, you can remain living in the house until you get evicted. This will give you an opportunity to repair your finances and until you figure out your next step.

You’re not responsible to keep the house in top shape like you are during a short sale.

Cons

You might lose sleep at night not knowing when you’ll get kicked out of the house you spent so much time making memories in.

You might feel embarrassed around your neighbors if the bank places a “Notice of Public Sale” outside your home.

The impact to your credit could take years to repair. A foreclosure can impact your credit score for up to 10 years.

You might not be able to buy a new house for 7 years. However, if you prove you had to foreclose your house under extenuating circumstances, you might be eligible to buy a house in 3 years.

Who Should Consider a Short Sale?

If you have weighed your options carefully and don’t want to go through a foreclosure, then a short sale is right for you.

The best candidates for a short sale are those who have negative equity on their property and are unable to make the payments on their house.

If you’re able to provide a good explanation to the bank why you need to short sale, you’re a good candidate.

Also, those who are considering a short sale, shouldn’t be that far behind or delinquent on their mortgage payments. Otherwise, the house might go into foreclosure before the short sale process starts.

Who Should Consider Foreclosure?

Some people battle between short sale or foreclosure when they have a bit more options.

However, homeowners who are delinquent on their payments, and don’t have a valid reason to request a short sale, might be left with foreclosure as the only option.

If thinking about your inability to make the payments on your mortgage is keeping you up at night and affecting your health, it might be a good reason to consider foreclosure.

Short Sale or Foreclosure: Which Is Right for You

Short sale or foreclosure, there’s no right or wrong answer. It all depends on what feels right to you and what will bring you the most benefits and free you from the financial burden.

Make sure you do your research to make the best decision for you.

Interested in learning more about whether or not a short sale is right for you? Then visit our blog for more tips.

Why Escondido Has Become A Popular Area For Short Sale Home Buying

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The one thing that can strike fear in the hearts of any homeowner is the thought of a foreclosure. For many of us, the idea of owning our own home is at the root of almost everything we do. We work hard to save and spend days, weeks, and sometimes even months and years to find the right home. It can truly be an emotional as well as a financial tragedy when we see a foreclosure coming up on the horizon. The scars it leaves behind may take years to recover from so many will opt to sell their home through a short sale.

Even though a short sale may be a more favorable option for a homeowner as opposed to a foreclosure, for the buyer it can truly be a win/win situation if you find the right location. By buying a short sale property a buyer can find the ideal investment at a reduced rate in a prime location like Escondido, California and at the same time ensure their future in a great neighborhood to offset their chances of additional investments along the way. Buying in Escondido, California may be one of the best places to give yourself that true winner take all feeling of success.

The Escondido Buyer’s Market

This is where there is an abundance of property available and a shortage of buyers. By buying at this time you get a little additional leverage in your negotiating efforts. By purchasing short sale homes in Escondido, you will be getting your new home at less than its full value. This can amount to a considerable savings in your home buying process and garner you some impressive perks along the way.

The Location

Escondido is ideally situated in a valley just north of San Diego. It offers a quite and peaceful atmosphere separated from the rest of the world by beautiful and majestic mountains. It’s close proximity to San Diego and Los Angeles makes it the perfect location for those who want the busier lifestyle of the city but the quite feel of the country at the same time. A commute to San Diego is less than 30 minutes away and to Los Angeles in around an hour. For those who work in these areas they can have the best of both worlds.

The Climate

Another major appeal for those who want the serenity offered by the City of Escondido is the amazingly temperate climate. The summers are dry with temperatures ranging between a low 60 to a high 90 and the winter temps settling between 42 and 70 degrees. Residents love the climate for its mild climate during all four seasons of the year. They can get the best of each season but not to its extreme as it may be in other similar locations.

The Community

Escondido offers more than 30 different neighborhoods to choose from each offering something a little bit different from the others. Depending on the amount of money you hope to invest in buying a short sale home at a reduced value could place you in an upscale neighborhood that you may not otherwise have considered. Many of these areas boast immaculately manicured lawns and beautiful homes on every street.

They are all located within a very short distance to downtown Escondido where you can enjoy the convenience of shopping and dining at some of best businesses in the city. Whether you’re just looking for a nice place to dine or you need to get your cabinets stocked with the best foods you’ll find you’re just a short distance from anything you could possibly need.

Escondido Schools

Education is an important part of Escondido life as statistics have shown that more than 20% of the city’s residents are holding at least a bachelors degree or higher. There are 22 different schools that make up the Escondido Union School District along with several private institutions to accommodate students of all ages and needs. You will also be in close proximity to several major colleges within minutes of the Escondido. With San Diego just moments south of the city you have access to famous universities like San Diego State College, La Sierra University, Chapman College, and the University of California, San Diego.

Culture

Another reason buying in Escondido has become so popular comes from the lifestyle that many of the residents lead. Aside from its close proximity to the things you need it is also very close to many things that can make life more enjoyable. The city offers parks, playhouses, eating parlors, spas, and beautiful wine country with miles and miles of vineyards to show that residents can enjoy. Year round events can keep you busy as you visit the many annual festivals that residents all enjoy.

Cost of Living

One of the reasons we choose to buy short sale homes is the savings on cost. This can continue even after you’ve purchased your new home. With the cost of living in Escondido, California at about 7% less than the rest of the state you can actually put away a little extra cash while living in some of the nicest areas in the country. With the median household income at a little over $53,000 it is clear why living in Escondido has become such a popular option for many homebuyers.

Escondido is a beautiful city situated in a beautiful setting making it one of the states most popular places to live. Its clean and polished environment will make you feel right at home where you can immediately start to enjoy all of the new and fresh amenities that the city has to offer.

Buying a short sale home is not always easy and may be a major hassle. Think about what you’ll get for your efforts. Not only will you get a beautiful upscale home at an extremely discounted rate but you’ll get a beautiful neighborhood full of all the things that make this type of city great; quality schools, positive communities, a near perfect climate, and year round entertainment whenever you need it. Can buying a short sale home in Escondido work for you? This will depend heavily on what you really want from your new home and community. Why not take some time and talk with an experienced real estate professional in the Escondido area to explore the many possibilities? You may be surprised at what you find out.

A Realistic View Of The Challenges Involved In Buying Foreclosed Property

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Investing in real estate foreclosures can be just as difficult and sometimes more challenging than investing in other types of real estate. Often people make assumptions about foreclosures that can make the entire process much more difficult. There are many myths that people have been lead to believe that have caused many problems as you proceed down the path to homeownership. Understanding these myths and the problems they can create can simplify the entire process.

Financing

Since the majority of those looking for real estate are expecting to finance their investment it is important that you each reach a full understanding of the process before they begin. Most buyers believe that they should first find the property of their choice and then find an institution to finance it. However, according to some experts finding the best deals on loans will require you to secure the loan prior to searching for a home. Once you’ve found the property of choice you may not have the luxury of shopping around for the financing afterwards. The risk of losing the property while you search can become very real and you may end up losing out in the end.

Pricing

It is not always a guarantee that the price of a foreclosure is the best price on the market. Just as with any other type of real estate investment it is important that you take the time to compare the prices to other similar properties in the same location. There are times when the prices can be listed considerably lower than those of similar value, there are also times when the price can be considerably higher as well. You will have to view and bid on the property in the same way that you would any other real estate on the market.

Condition

Most foreclosed homes are sold “as is.” In a normal purchase you could reasonably expect to negotiate the price based on the repairs needed or the cost of pulling the property into a livable condition. However, with foreclosed properties this option is usually off the table. As a matter of fact, most foreclosed properties are already listed as low as the bank may be willing to go. While you may have a bit of leeway in negotiating the final price it would be in your best interest to understand that the pricing won’t change that much because of poor housing conditions.

Finally, you’ll want to consider the timing that may be involved with buying a foreclosed home. Because many of these homes are already priced well below current market value you can fully expect that they may not be on the market for a long period of time. Many of them could sell within days or even hours of the time they are listed. Being prepared to move when the opportunity arises will help you to get the right property when you find it.

Understanding that while foreclosures can prove to be an excellent opportunity for those looking to invest in it is also extremely important that you realize the unique challenges that may come with this type of property. It may seem difficult and at times be overwhelming there are many rewards when you choose to invest in a foreclosed piece of property. Keeping a realistic view of the challenges you face before you begin can help to take some of the edge off of the stress that may be involved.

Watch Out For The Emotional Side Of a Short Sale

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Understand the Emotions that Come with a Short Sale

Homes are sold under a short sale when a homeowner can no longer pay the mortgage for the property, but it is still in good enough condition to be sold to the lender.  They way, the homeowner can get a majority of their money back right away.

When someone has to sell their home as a short sale, the money that isn’t recovered from the sale of the home has to be repaid by the homeowner over time. The amount that they have to pay each month will be significantly less than their mortgage payment. This tends to be a better financial option for them in the end.

Selling a house as a short sale can come with emotional turmoil. If you have recently learned that you can sell your house as a short sale, you need to be prepared for the emotional roller coaster that will be coming in the near future.

Face the Fear

Selling a home as a short sale can be very scary. You want to be sure that the house sells for as much as it possibly can so that you have to pay as little to the mortgage company as possible.

Many people become scared during the initial stages of a short sale because so many things are left up in the air. You don’t know when the house will sell, how much it will sell for or how much you are going to have to pay.

It’s Okay To Feel Some Depression

When selling yourself as a short sale, it’s common to feel sadness and sometimes become very depressed. There are often many memories attached to a home and feeling like you have no other option but to sell it can leave you feeling very sad.

You don’t want to leave behind your treasured memories, but you also know you don’t want to be in financial ruins and selling the home short sale is the best option for you at that time.

Self-Loathing

Many people begin to experience self-loathing when they have to sell their home as a short sale. They feel like they didn’t make the right choices and start to become angry at themselves for not making changes when they could have made them. It’s important to cut yourself some slack and realize that everyone goes through hard financial times, eventually and that how you handle the situation is really wants important.

Residual Anger

Anger is often an emotion tied to short sales.  Homeowners get angry at the fact that they can’t stay in their home.

They feel like there should be other avenues available to them. Sometimes feel like they were led to having to sell their home. Being angry about the situation can cause you to be closed minded and not take the necessary steps to be able to sell the house.

You want to sell it quickly so that it doesn’t go into foreclosure because they can create an even more difficult situation for you.

On the Other Side – Relief

Once someone decides that they want to buy the house and the buyer and mortgage holder agree to a set price it will give you relief.

You’ll finally know how much is left for you to pay for the home and be able to start planning for your future. You will be able to know what your true finial situation is. You also won’t have to worry about the house possibly going into foreclosure.

Excitement

Eventually, you will more than likely reach the point of being excited about the short sale. You no longer have to struggle to try to pay the mortgage each month. You’ll be able to start your life over again and rebuild your finances to get yourself into a better place.

It will take time but eventually, you may be able to get yourself to the point of being financially independent. You’ll be able to use the short sale as a life lesson that you can grow from and avoid in the future.

A short sale can seem like the end of the world at first. It’s important to realize that everyone goes through hard financial times and being able to live and learn from the experience can make you stronger in the end.

You don’t have to let the short sale define you. Over time, your credit score will improve the short sale won’t even matter when you buy your next home.

Understanding How Short Sales Work

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When you are ready to buy a new home there are many options available to you. As you look through the many properties on the market you’ll notice that there are many different types of listings, for sale by owner, foreclosure, upside-down, and short sale. If you are new to the real estate industry chances are you’re more than a little confused about what all these terms mean. In short, they all mean basically the same thing. The seller is unable to continue to pay his mortgage and needs to get out from under his financial burden. Purchasing a home under these conditions could prove profitable but you still need to be aware of what these types of transactions entail.

The Basics of a Short Sale

With a short sale, the lending institution has accepted a condition of hardship from the homeowner and has agreed to accept less than the balance owed on the mortgage. This situation while seemingly dire can be beneficial to the bank as it saves them the cost of repossessing the home in foreclosure and then reselling it. It also benefits the seller by freeing them from their financial burden that is damaging their credit.

How it Works

A short sale allows the property to remain in the possession of the homeowner rather than default to the bank. The bank is not the property owner but merely the holder of the lease. However, the agreed upon price on the sale of the property must be approved by the bank since they are the ones that will be taking a loss on the property and not the seller.

The Contract

When purchasing a short sale property the contract will differ slightly from the traditional sale contract. In a normal transaction the seller is the only party that needs to approve the sale. They have to agree on the price and the terms exclusively. However, with a short sale it is the bank that has to give the approval of the terms.

The contract also needs to include the term “as is” so that the buyer is aware that chances are the property will most likely be in need of some repairs. While it is perfectly acceptable to include specific details in the language that allows you to vacate the deal after an inspection reveals major problems it does not usually allow for you to renegotiate with the bank for a lower price on the sale. Asking the bank to fix or update the property in any way will not be possible.

Of course there are many pros and cons that come with buying a short sale property and only you can decide if it will be the right investment choice for you. For the savvy investor there are many good deals to be discovered that could prove to be a virtual gold mine and a short sale property is an excellent way for first-time buyers to get into a home that they may not be able to afford otherwise. Take your time, weigh all the options, and be patient and you will soon find the right property for your next real estate investment.