Are you interested in buying a new home or real estate investment property? The current turmoil in the real estate market offers savvy buyers great opportunities to purchase real estate at a discount. A record number of homeowners are now at risk of foreclosure or at risk of foreclosure. Foreclosure, however, will destroy a homeowner’s credit. An alternative to foreclosure is a short sale. In a short sale, the owner and the lender agree to sell a property for less than the amount owed on the loan.

If you are considering buying a short sale, there are a few key points to consider.

• Get a real estate agent: A real estate agent can help you find the perfect property. Choose a licensed real estate agent who has experience in short sales. Properties may or may not appear as short sales. However, short sale listings often state that offers must be approved by the lender.
• get a lawyer: Even if the seller doesn’t have a lawyer, that doesn’t mean you shouldn’t. A short sale may have tax implications as debt forgiveness may be considered income to the seller. Also, a lender can go after the borrower for the difference between the amount owed and the amount paid. For more information and help finding a real estate attorney, visit RealEstateAttorneyGuide.com
• Check the local market: Your real estate agent should be able to obtain a comparative market analysis. You’ll be able to see active sales, pending sales, and past sales of other similar homes in the area.
• Check public records: Before making an offer, find out who is on the title, if there has been a foreclosure and how much money is owed. Also check if there are multiple lenders involved. Multiple lenders can complicate the approval process.
• Get pre-approved: The lender will want to see that you are pre-approved and have a loan available.
• Give the lender a deadline: Any offer you make must be contingent on the lender’s acceptance. Be sure to give the lender a deadline to accept, after which you can cancel. Most lenders should take two to three weeks to make a decision.
• Wait for Commission negotiations: Since the seller does not receive any money from the sale, it is actually the lender who pays the realtor’s commission. The lender will likely negotiate a lower broker’s fee.
• Inspect Property: Be sure to properly inspect the house. Do not waive your right to carry out inspections and make your offer subject to their approval.

Buying a short sale can be difficult, but it can also be very rewarding. For more information on buying short sales or foreclosures, visit GreatForeclosureListings.com