If you’re eyeing a home that’s a potential short sale, be prepared to be in the home buying market for the long haul. Short sales can be more time consuming than traditional home sales, but if you’re in a position where you can be flexible with your close date, your patience could well be worth the wait. Homebuyers may find the opportunity to potentially buy a home at a reduced price appealing.

A short sale means that the seller has negotiated -or intends to negotiate -with their lender to pay off their existing mortgage for less than what they owe on the home. This is different from a foreclosed home, where the homebuyer has defaulted on the loan and the lender already owns the property. With a short sale, you are negotiating with not just the seller but also the lender; even if the seller accepts your offer, the lender may not.

Keep in mind that it’s important to work with a real estate professional that is experienced in short sale transactions. An experienced Real Estate Agent can help expedite the process and protect your interests as a home buyer.

Many homes on the market may be advertised as short sales or foreclosures, which can mean a low price for you as a buyer. Understanding the difference between a foreclosure and short sale could prove helpful when trying to buy a home in New York.

If a home is in foreclosure, the seller’s lender has taken title of the home and is selling it directly. If a home is being sold for less than what the current seller owes on the property, and they do not have funds to make up the difference at closing, the sale is considered a short sale.

The challenges of purchasing a foreclosure or short sale vary as well. First, foreclosures often end up in disrepair after sitting vacant throughout the foreclosure process.

Meanwhile, the main difficulty of purchasing a short sale is that it is a time-consuming process. After a homebuyer has come to an agreement with the seller, the lenders then have to approve the sale before closing. When there is only one mortgage, experts say lenders take on average two months for approval, while if there is more than one mortgage with different lenders, the approval can often take up to four months or longer.

Lenders are known to like no-contingency offers and closing terms that are flexible. Buyers are advised against a short sale if they have a home to sell before closing on a short-sale purchase or have to be in a new residence before a specific time.

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