What is a short sale?

A short sale occurs when the proceeds from the sale are not enough to cover the mortgage and other liens on the property. When this happens the seller is obligated to cover the difference, unless he's able to negotiate a deal with the lender. Quite often this means the lender ends up taking a loss on the sale.

A short sale purchase usually requires more time and patience on the buyer's part. Once an offer is accepted by the seller, it then needs to be approved by the lender. This means the buyer may need to wait as long as 30 to 60 days before he knows whether or not the lender will approve the offer.

Your buyer agent can help you successfully navigate the short sale process. For example, your buyer agent can help you structure your offer so you don't need to submit your earnest money, conduct your inspection, or obtain your loan commitment until the seller's lender has signed off on the offer. That way you'll be protected against any unnecessary outlays should your offer not go through.

Your buyer agent can also help you research the seller's mortgage, property taxes owed, and any other liens prior to your offer. Then you'll be able to estimate the dollar amount that the lender will be on the hook for if the lender approves your offer. That's very good information to have as you prepare to negotiate.

For more information on how you can research properties, check out the buying real estate page at DaneCountyMarket.com.

Dan Miller, Keller Williams Realty and DaneCountyMarket.com