- The first step is to identify properties that are being sold as short sales. These are commonly referred to as "pre-foreclosure" and can be located easily with the help of a real estate agent.
- It is important to look closely at properties that are available for short sales, as they are more likely to be in disrepair and will not be staged as nicely as homes that are not being sold by distressed sellers. Homes are generally available for short sales once the seller is several months behind on the mortgage. They may already be vacant.
- Once you identify a property, you need to research its value to ensure that you are really getting a deal. Determine what the property is worth, what similar homes in the area are worth and how much it will cost you to make the necessary repairs to the home. You should also evaluate the home's potential -- what it will be worth once you have purchased it and made repairs.
- An offer on a short-sale home must be accepted by both the seller and the seller's lender. This can be a time-consuming process. Some banks will require that you complete a special short-sale application. Others will require proof of financing. Some banks have even more specific requirements, including that you obtain your mortgage through them, or that you waive certain rights to inspections. Be sure that you understand the contract that you are entering into and that you are comfortable with its terms.
- Once a contract has been approved by you, the seller and the seller's lender, the process proceeds much like a normal sale. But even this process may be prolonged due to the necessity of satisfying the seller's bank in addition to your own.
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