Short sale homes can often represent bargains for "patient" home buyers, and short sales can also be the cause of great frustration.  When selecting a Realtor® the potential home buyer should ask if the agent has much short sale experience.  With the help of a Realtor® experienced in short sales and distressed property sales, the homebuyer can weed out the transactions that either may not successfully close or that may sell from a price or terms significantly higher than a listed price.

The homebuyer first needs to be aware that a "listed price" is only guide and the property is not guaranteed to be sold at the list price.  If a foreclosure sales date is set, the list price may be lower than if a date is not set- in order to attract quick offers.  The price at which a short sale property actually sells though requires the approval of all terms by the current lien holder or lien holders.  If there are two lenders, each lender must agree to the short pay settlements offered, and it is not uncommon if there is a second mortgage lien holder for that company to request additional money either from the buyer (prior to the close of the transaction) or from the seller (homeowner).

The process of approving a short sale transaction and determining the sales price may take anywhere from 30 -90 days or more depending upon the number of lien holders, and the complexity of the file. A home buyer needs to be prepared to wait patiently for an approval of the sale and the price.  It is possible that the short sale may be approved but a counter offer may be issued on the price. 

When buying a short sale, the homebuyer needs to be prepare for the length of time to receive an answer from the banks as well as a plan of action if there is a counter.  In some cases with multiple liens, the second mortgage holder may ask for a payoff several thousand dollars above what the first mortgage holder has offered.  The agents then may look to the buyer to contribute to the larger payoff.  When dealing with a short sale with two lenders, the home buyer needs to be prepared for this scenario.

When a price is agreed upon, the escrow period is similar to that of standard sales with the exception that the seller will most likely not provide any repairs.  The homeowner no longer has money to fix needed repairs, and the bank has agreed to a short pay so repairs will most likely not be approved.