A short sale means the seller's lender is accepting a discounted payoff to release an existing mortgage. Just because a property is listed with short sale terms does not mean the lender will accept your offer, even if the seller accepts it.

Be aware that the seller will need to be in default, to have stopped making mortgage payments, before a lender will consider a short sale. Also, the seller might have over-encumbered, owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.

• Basics of Short Sales

• What is a Foreclosure?

• Buying at a Trustee's Sale

Check the Public Records
Do your research before making an offer to purchase. Your agent can find out who is in title, whether a foreclosure notice has been filed and how much is owed to the lender(s). This is important because it will help you to determine how much to offer.

If there are two loans, you will probably deal with the second mortgage lender. The first mortgage lender's position is protected by the second lender unless the second lender does not want to foreclose. For example, if a seller owes $160,000 to the first lender and $40,000 to the second lender, you cannot offer $160,000 because it will wipe out the second lender.

• Determine Your Type of Marketplace

• What is a Title Policy?

• Chain-of-Title Definition

Hire an Agent with Short Sale Experience
It's one strike against you if the listing agent has never handled a short sale, but it's even worse if your own agent has no experience in that arena. You need an experienced short sale agent. An agent with experience in short sales will help to expedite your transaction and protect your interests. You don't want to miss any important detail due to inexperience or find out your transaction is not going to close on time because no one has followed up in a timely manner.