Everybody has to believe that they are a winner.
The seller needs to know that they've gotten out of a bad situation with less credit damage and a new start.
The buyer wants to make a purchase of a property below the true market value, at least in the near future.
The lender must believe that the short sale will net them at least the same or more money than a foreclosure auction.
If we're the buyer, then our interests are best served by a purchase at the lowest possible price that will be approved by the lender. And remember, the seller gets no cash, so we are just showing them a way out of a foreclosure action.
Here's what you're looking for as the buyer in a short sale transaction:
A homeowner upside-down in their loan. Their home is worth less than they owe on it.
Clear title and no massive liens or claims against the property that can't be negotiated away.
Enough time to complete the short sale before foreclosure auction.
A willing seller with a desire to help in order to avoid foreclosure.
A current valuation that will allow you to buy the home for a huge discount, creating instant equity.
True hardship on the part of the seller to convince the lender a short sale is the best option.
If VA or FHA, the situation meets their criteria for short sale.
In short, you are looking for a homeowner owing more on their home than they can get in a sale, and a situation where the lender will approve a purchase price that meets your investment goals. And with today's economy, that's easy to find.
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