Agent

Buying a short-sale property comes with risk

In this deal, ball is in lender's court

In the recent past, the inventory of homes for sale was pitifully low. Now, the number of homes for sale has increased in many areas. However, there are listings being offered for sale on less-than-advantageous terms. An example is the so-called "short sale." In a conventional home sale, the buyer usually needs only the seller's acceptance in order to go forward with a transaction. However, in a short sale, the lender's approval is also needed in order for the sale to close. A short sale occurs when a property sells for a price that is insufficient to pay back the loans secured against it and the seller's closing costs. In such a case, the sellers either have to come up with enough cash to cover the shortfall, or their lender(s) must agree to forgive the amount that the sellers are short in order for the sale to go through. Short sales have not been a big part of the home sale market since the recession of the early 1990s. At that time, home prices dropped as much as 20 per...