When a property owner can no longer afford to pay monthly mortgage payments, and owes more on the property than it is worth, a short sale is a way to sell the property and avoid foreclosure. Lenders must agree to the short sale, since they will be losing money. However, most lenders consider that short sales can be more economical than incurring additional costs in foreclosing on properties. Condos are a popular short sale target, since the condo market has been hit hard with the downturn in property prices.
Determine how much money is available for a property down payment, and then calculate the maximum amount that is affordable for a condo. Review income and expenditure and calculate an affordable monthly mortgage payment. Consider condo fees when calculating monthly expenses. These can be costly and are in addition to the mortgage payment.
Read local and regional newspapers and classified advertisements and consult real estate agents to find condos in a suitable location. Look for the words "short sale" in listings to ensure that the lender has given permission for the property to be sold as a short sale.
Contact local lenders and real estate professionals. Request listings of properties available through short sales. Compile all available short sale properties in a notebook, and choose the ones that are within an affordable price range.
Visit and tour properties of interest. Take notes regarding condo fees when touring properties and compare choices. Remember to note the condition of the properties. Generally, lenders will not undertake to pay for any repairs.
Make an offer for a short sale property directly to the lender, or through the real estate professional who has the short sale property listed. Pay attention to the price offered and do not exceed an affordable maximum.
Continue to keep in touch with the lender to imply the seriousness of the offer. Keep notes of new pricing requests, as the lender may keep taking offers for the condo, to attempt to recoup as much of the outstanding loan as possible. Be prepared to walk away from a property if a bidding war commences.
Wait for the lender to accept the offer. Short sales offers can often take up to six months to receive a positive response and acceptance from the lender.
Always verify with the lender that a property is available for short sale.
Never purchase a property you cannot afford.
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