A short sale takes place when a seller of a home has a mortgage loan on their property that is greater than the current market value of their home.
The seller's lender must agree to settle the mortgage debt, or short it, to allow the seller to sell the property. The alternative to settling the debt would be for the seller to pay the difference.
Most lender's that agree to a short sale require the property to be sold "As Is" or sold in the condition the property is in. A seller may not be able to make repairs to the property.
When preparing an offer, you could add a home inspection addendum or an "As Is" home inspection addendum. This can give you comfort to know the condition of the property is satisfactory.
Even if the seller excepts your asking price, their lender may give a counter offer after after the seller submits your offer to their lender.
Typically, lenders order a broker price opinion or a home appraisal to determine the fair market value of the home. If the lender determines the value is more than your offer, they could counter. There are options to still negotiate a fair purchase price.
In Maryland, it's outside of the scope of a real estate agents license to negotiate a short sale on behalf of a MD homeowner.
The seller must either hire a Mortgage Assistance Relief Service Provider, a Maryland Attorney, or a Non-Profit to negotiate with their lender.
As a buyer, it's important to figure out who the seller hired, and make sure they are experienced with the process. This can be the difference between a shorter timeline for an approval or having the process drag out until you've eventually had enough waiting for an answer.
Working with a Realtor® experienced with short sales is important and shouldn't be overlooked.
Taking what I've learned from the mortgage and housing industry and the US housing collapse, I strategically assist my clients throughout the home buying process.
I'm committed to being different by being an educator, and not a salesman. You should always be informed and comfortable when buying a home and selling your home
There's a lot of initial research that should be done with these transactions. There's Things You'll Kick Yourself for Not Knowing When Buying a Short Sale.
Learn how create a plan for buying short sale homes, so you're not kicking yourself later.