What to Expect When Buying A Short A Short Sale Home

Excited about buying a short sale property because you found one and don’t know what to expect? You’ve come to the right place. You need to make sure you know what to expect because deep down it’s just too good to be true, and it often is. To make sure you get a great deal, we listed down the things you can expect when you buy a short sale home.

We’ll walk you through what to expect step by step, explain the possible bumps in the road, and show you how to prepare for your success.

 

First of All, What Is a Short Sale?

A short sale happens when a homeowner needs to sell their home for less than what they owe on the mortgage, and the bank or lender agrees to accept that lower amount. For example:

• The homeowner owes $250,000,
   
• But the home is now only worth $200,000,
   
• And the bank agrees to accept the $200,000 sale.
   

In this case, the seller doesn’t make any money—but they get to avoid foreclosure, and you, the buyer, might get the house for a lower price.

 

Why Are Short Sales Cheaper?

Short sale homes often have lower asking prices than similar homes in the area. That’s because the bank is trying to avoid a bigger loss by getting the home sold quickly.

But just because the price is lower doesn’t mean it’s simple. In fact, the term “short sale” can be a little confusing. It’s called a short sale, but the process often takes longer than a regular home sale.

Let’s talk about why that is—and what you can expect as a buyer.

 

What the Buying Process Looks Like

The Steps Are Mostly the Same

When you buy a short sale home, the process looks a lot like buying any other home at first:

1. You get prequalified for a mortgage.
    
2. You find a home you like and make an offer.
    
3. You get a home inspection.
    
4. You wait for the deal to close.
    

But here’s the difference: With a short sale, the bank has to approve everything. That can take more time, and sometimes things get complicated.

 

Why Does It Take So Long?

When a seller accepts your offer, that is not the end of the deal. The seller’s decision doesn’t matter as much as the bank or lender’s decision because they ultimately have the last say. They have to:

• Review the seller’s hardship
   
• Double-check your offer
   
• Make sure everything is in order
   

This can take weeks or even months. So while it might seem like a good deal upfront, you’ll need to bring some patience to the table.

But the good news is: Many banks have gotten faster and better at handling short sales. In recent years, the average time it takes to close a short sale has gone down, which means things are improving for buyers like you.

 

Possible Roadblocks You Might Face

Short sales can come with a few extra challenges that aren’t part of a regular home purchase. Here are some things that could slow things down—or even stop the sale.

1. Second Mortgages

If the seller has more than one mortgage on the home, each lender needs to agree to the short sale. Sometimes the second lender doesn’t want to accept less money, which can cause delays.

2. Mortgage Insurance

If the seller has mortgage insurance on their loan, the insurance company might need to approve the short sale too. That’s another layer of approval that can take time.

3. Liens on the Property

A lien is a legal claim for money owed. If someone else (like a contractor or tax agency) has a lien on the property, that has to be settled before the home can be sold.

4. Government-Backed Loans

If the seller’s loan is backed by the government—like an FHA or VA loan—it may take longer to get approvals. These programs often have extra rules and paperwork.

5. Homeowners Associations (HOAs)

If the home is part of an HOA, the fees related to the sale might not be covered by the bank. That could become your responsibility unless it’s worked out ahead of time.

 

The Short Sale Buyer’s Checklist

Ready to start the short sale buying process? Here’s a handy checklist to help you stay on track:

1. Get Prequalified for a Mortgage

This is important so the bank knows you’re a serious buyer who can afford the home. Talk to a lender and get a prequalification letter early on.

2. Get a Home Inspection

Most short sale homes are sold as-is, which means the bank won’t fix anything. A home inspection can show you what kind of repairs or costs you might face before you move in.

3. Ask About Agent Commission

Sometimes short sales involve confusion over who pays the real estate agent. Make sure you understand if the bank covers it or if you’ll need to pay part of it yourself.

4. Be Ready to Submit Paperwork

You may need to send documents to the seller’s bank, like your offer, loan approval, and proof of funds. Your real estate agent can help with this.

5. Be Patient—but Also Persistent

Short sales can take time, but don’t be afraid to check in and follow up. Banks are better at processing short sales now, so stay positive and stick with it!

 

Tips for a Smoother Experience

If you’re thinking about buying a short sale home, here are some quick tips:

• Work with a real estate agent who has short sale experience. They’ll know how to talk to banks and speed things up.
   
• Keep backup options open in case the sale falls through.
   
• Stay organized by keeping copies of all paperwork and emails.
   
• Don’t skip the inspection, even if the house looks fine on the outside.
   
• Budget for repairs—short sale homes are usually sold as-is.
   

 

Final Thoughts

As much as you want to jump on it as quickly as possible, you still need to take precautions. Not just a simple precaution, but precise and not rushed. Otherwise, you’d end up in some pitfall you don’t need just because you weren’t careful enough. I hope this guide acts as your tool for your sucess.

If you're ready to move forward:

• Talk to a lender
   
• Get prequalified
   
• Work with a knowledgeable real estate agent
   

And remember—every short sale is different. But if you stay informed and ask the right questions, you’ll be in a great position to make a smart decision.