Should you be looking at "short sale" homes?

You may be hearing a lot about buying properties "short," like it's some modern-day Gold Rush, where homes are being offered for 50% off or more. Short-selling is when the bank agrees the home is worth less than what it was financed for.

Having bid on a bank-owned property in the past year, I can tell you that this is not so. Buying properties that are being sold "short" -- in other words, for less than what the owner owes the bank -- can be a frustrating process. But as with anything that involves a lot of effort, it also has the potential to be quite rewarding.

Before you start out, however, better do your homework. Understand exactly what you're getting in to before embarking on this complex and often frustrating mode of transaction.

If you think that dealing with an individual owner or couple can be frustrating, imagine dealing with some committee at a big corporate bank. Their also may be more than one bank involved if the owner has a second mortgage.

When I made an offer on a short sale, the bank didn't get back to me on whether my offer was accepted for more than 30 days. So set your expectations of a speedy sale on low. On the other hand, if your area has a lot of short sales, like Orlando or Las Vegas, your experience might be different.

Go to AOL Real Estate for more information on short sales.

Brett Widness is an editor with AOL's real estate channel and a licensed agent in Virginia.
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