If a house sale price is below the current loan amount owed to the bank the seller, the seller transfers the last time and no other funds make up the difference, such sales are considered short sale (SHORT SALE). Because unemployment, decline in real estate values ​​rapidly and other factors, as well as more owners find themselves having to sell the house for short.

But the purchase of short sales has many potential pitfalls. So before you buy to understand the risks it is very necessary.

If you have the following conditions, then you are a good candidate for a short sale purchase:

You are very patient. Even after you have reached with the seller to purchase a short sale property agreement, you must wait until the seller's bank (or more banks, and if there is more than one mortgage loan words) approval before they can apply for transfer procedures. If there is only one mortgage, short sale expert said the bank approval process usually takes about two months. If there is more than one type of mortgage loan, banks usually take four months or longer approve the sale.

Possible financing. Banks prefer cash transactions. If you can not pay all cash to buy short sales, you must prove that you are qualified and your sources of funding. If you have a pre-approved bank books, as well as relatively high down payment, and can be completed at any time transfer, the bank will offer you a price deemed better than other buyers.

You do not have any conditions. If you sell your existing house first before you buy short sales - or you need to move into a new home within a specific time - a short sale may not be suitable for you. Banks like no conditions and ready for transfer to the buyer.

If you really want to buy short sales, then an experienced professional to assist you is essential. You can consider these professionals:

Experienced real estate lawyer. Only about two fifths of the short sale of access to bank approval. However, an experienced short sale real estate lawyer will increase contract opportunities for the bank to be recognized. In addition, if you want to put any provisions or very specialized language written into the purchase contract, real estate lawyers in the whole negotiation process is essential.

A qualified real estate professional. * You may have friends or relatives for real estate, but if he (she) does not know the short sale transaction process, cooperate with his or her transfer may reduce your chance of success. Interview several real estate brokers, ask them how many short sales have been on behalf of buyers, many of them successfully transfer. A qualified real estate professional can help you find short sales to help you negotiate the purchase and so on.

Property personnel. There is a property right person to do a preliminary search for short-sale property in the house to see what are the lien holder. If there are multiple lien holders (eg, second or third mortgage, real estate tax liens, mechanics liens, homeowners association lien, etc.), to obtain short sale contracts and smooth transaction becomes more difficult. Even if you are audited by the bank to wait for several months, and any lien holders can put this process is aborted. If you do not know the title officer, your real estate attorney or real estate professional should give you a few suggestions.

Short sale buyers face a number of other risks include:

Potential denial. Banks want to minimize their losses. If you bid much lower than the fair market value, then your bid will be rejected and you will waste a few months time. Or a bank could make a counter-offer, which will extend the entire process.

Unfavorable conditions for buyers. Even a short-term loan approved the sale, but the bank may require the seller to sign a promissory note to repay the loan amount of the deficiency, which may be some economic desperate sellers unacceptable. In this case, the seller had to refuse to handle trading procedures. Banks also can change anything you and the bank has negotiated the terms of the contract, you probably can not agree.

No repairs or repair costs. You will probably be asked to follow the same house purchase. Banks have been lost on this listing some money, would not agree to re-pay the cost of any repairs or restoration.

* Not all real estate agents are members of the National Association of Realtors, the National Association of R.