Buying a home that is being sold on a short sell situation can be a good deal. In these situations the owner owes more on the mortgage than they?re willing to accept as the purchase price. The problem for buyers is that the bank ultimately has discretion on whether they will accept the short sell or not.
This means that you can go through every step in the process from paperwork to an accepted offer, from inspection to down payments and the bank can still refuse the deal. You?ll get your down payment back but not any money you?ve put toward inspections or other services. You?ll also have wasted a significant amount of time which can be crucial for some people. Not to mention the emotional rollercoaster a short sell can be.
The bank basically wants to make as much money as they can, in a short sell situation they?re accepting a loss and their major determination is whether they?ll lose more on the short sell or a foreclosure. As a last ditch, after a potential buyer has done everything from their end the bank will try to work out a deal with the seller to keep them in their home and not write off the short sell amount. This is where the potential buyer can totally lose out so one thing to look for is a short sell where the seller has already moved, they?re less likely to deal with the bank to keep their property.