Are you considering buying a short sale property? A short sale is the sale of a property where the net proceeds from the sale are short of the debts secured by the liens on the property.  This can be a complex process with many moving pieces. But there are many reasons this may be a good choice for you. You will be competing with fewer buyers, and you may be able to purchase your home for well under market value. However, since the short sale process is different from a traditional home sale, here are 4 things you should know in order to have a successful short sale purchase.

  1. You May Have to Wait
    If you put an offer on a short sale home, you may have to wait several months, or even longer before all stakeholders accept the offer. This is because a short sale property may have more than one bank with a lien on the property (second mortgage, line of credit, etc.). Be prepared to wait, and to move quickly once your offer is accepted, as you may have only a small window in which to take action. If you are not in a flexible living situation, a short sale may not be the right choice for you.
  2. Stay Updated
    Keep in touch with your real estate agent and ask them to keep in touch with the listing agent, who can provide updates. Because short sales often involve a waiting period, it is possible your credit report will be reviewed again before you close on the property. Stay on top of your finances, and avoid making large purchases, making late payments, or doing something that could affect your credit negatively. Throughout the waiting period, make sure you stay in contact with your Loan Originator as well, and provide them with recent pay stubs and bank statements.
  3. Be Prepared to Make Improvements
    Often, a short sale property will need considerable home improvements. Take this into account when deciding whether to submit an offer. If you do not have the time or finances to invest in repairs or improvements, you may want to reconsider purchasing a short sale.
  4. Don’t Get Discouraged
    The long waiting period may be discouraging, but it is normal for short sales and is not necessarily a bad sign. However, a short sale is a fluid situation. After a lengthy waiting period, your offer may be rejected, or counter-offered. This doesn’t mean that you will never find anything. Continue to work with your real estate agent and lender and explore all of your options. They will help you find the right home.

Purchasing a short sale property can be complex, but often the reward can outweigh the challenge. If you have any questions about purchasing a short sale, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!



Written by Guest blogger: Sherman Hardy

Foreclosures and its counterparts (short sales or deed-in-lieu of foreclosure) can be extremely problematic for military buyers. For those who have faced foreclosure may or may not know that it was not in their best interest. Having a foreclosure means you will not be eligible for a VA loan for at least two years. Borrowers who experienced the loss of a home due to a foreclosure proceeding will not be able to purchase for two years after the deed is transferred from their name.

I wanted to clear the misconception about VA Home Loan Guarantee Eligibility after a foreclosure; a veteran who has a VA loan foreclosed upon can obtain another VA loan in the future. Many service members have been told otherwise by bank officials, mortgage brokers and others who either didn’t understand the program or who were looking to make a buck with their own financing options.

When a veteran home has been foreclosed upon the lender must determine how much of a primary entitlement the borrower has left (if any at all). This is where a second-tier entitlement comes into play. One of the downsides to a second-tier entitlement is there’s a minimum loan amount of $144,000. This secondary entitlement is also used to allow a veteran to have two VA loans at the same time.

Sherman Hardy, Real Estate Professional, 301-659-5004 or


*This blog is for information purposes only. NFM, Inc. accepts no liability for its content.  Please visit the US Department of Veterans Affairs website for more information: