Buying a house listed as "short sale" means that it is priced below market value and the owner (usually the bank) is already taking a huge loss on the property and is looking to sell it short, just to get rid of it.  A short sale property is sold "as is", meaning that the buyer is responsible for any repairs that might be necessary.

So, what's the quickest way to lose your bid in the short sale process?  Demand that the seller fixes whatever defects the inspection digs up.  It's just not going to happen. In fact, the seller might find it easier to negotiate with a new buyer than to renegotiate price with you.

"It's not unusual for a bank to agree to a heavily discounted (price) because the property is only worth what it is worth at the time of sale." writes Elizabeth Weintraub on About.com.  

"Let's say a home is worth $100,000. If the commission, title and escrow fees, property taxes, and all of the costs of sale total $10,000, for example, the bank will receive $90,000."

"If the bank was to authorize repair costs, the money for those repair costs would be deducted from the $90,000, netting the bank even less."  Plus, says Weintraub, banks usually price these homes below market value to allow for unexpected repairs.

A short sale is a great way to get more house at today's low prices, but "buyer beware".  Make sure you understand what you are getting into.  Have the home inspected, so you know what to expect and have a real estate professional help guide you through the home buying process.

Read the full article at About.com.

Posted in Buyer Resources, Headlines

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