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My goal is to write a 3 part post over several days contrasting the differences between Short sales, Foreclosures and New builds. Please keep in mind that results can vary on a case by case basis. I would love to get some feedback about buyer's experiences with either short sales, foreclosures or new builds. A short sale generally occurs when an owner is trying to sell a home below what he/she owes on the mortgage. Banks generally will consider short sales if there is a hardship with paying back the loan. The short sale process starts between a Realtor (listing agent) and a home owner. After an offer has been submitted, the owner steps to the side and the bank decides the outcome of the transaction. What the owner wants to happen is to receive an offer high enough that the entire loan will be covered. That doesn't usually happen, since the listing price is generally under the loan amount. what the owner wants to happen is for the bank to accept an offer less that the amount owed, and forgive the remaining debt from the owner. There are a few things that can happen with the debt including forgiveness, taxing or even a promissory note from the seller to make the debt whole. Please consult an attorney and/or accountant when thinking of listing your home for a short sale. GOOD: 1. Some great deals can be found in short sales. 2. Buyers get "1st crack" at some of the deals before they hit the foreclosure market 3. Many short sales will be newer homes that have depreciated in our tumbling market (the exception would be homes that have been refinanced or had a 2nd mortgage taken out) BAD 1. Generally, banks require 4-6 weeks to give ANY answer on a short sale. (4-6 weeks is a lot of time for them to get another offer in on the same property) 2. You can make an offer of FULL list price and the offer can still be turned down! banks are requiring what is called a "short sale addendum" which states that the bank will have final say on all offers submitted. (I have actually had several full price offers turned down) 3. Remember, the listing Realtor set the price, not the bank What I generally tell my short sale buyers is: 1. Try and stay emotianally unattached from a home. It is after all, only an offer. 2. Don't mentally move in yet. 3. Find several favorites, make offers on more than 1 property. The offer has a clause in it that says we can pull the offer anytime before acceptance. We can also let them know that we have multiple offers out. http://valleymarketblog.com/index.php/12/