February 02, 2008 09:55 AM

I have mention in many of my articles the new resurgence of the term Short Sale. The current market conditions have made this the only option for many sellers in parts of Northern Virginia and especially Prince William County. I have discussed Why to Buy a Short Sale and its advantages over REOs or foreclosed homes but an important question is why a buyer shouldnt buy a short sale.

Buyers expect to get a good price on short sales but do not always understand why this is the case. The reason a short sale should sell just below market is because of the risks the home buyer is taking. The reason for the risk is based on 5 words that will be written in the contract, subject to third party approval . This third party is the bank, lender, or investor, whoever actually owns the loan. They are the party who makes the final decision of what price they will sell the home for and at what terms. The problem is the third party can make the decision the day of settlement when the final HUD statement is available. This can cause troubles for a buyer who has all their furniture sitting on a moving truck and the lender decides not to agree to the terms.

This is very important for buyers to be aware of because no matter what the contract says that the owners agreed to, the lender can still refuse to sell at the last minute. The buyers who have a place to live in the interim in case the settlement gets delayed will be in a better position to buy a short sale. The best advice I can give any buyer or agent dealing with a short sale in any capacity is have patience.

There are other issues to be aware of that also add risk and include any title issues that come up, home inspections, and if the property is being sold as is. These are all very in-depth issues that should be discussed with an agent before placing an offer on a short sale home or any other real estate. Here is a recent article detailing a few ways on how to Loose Money Trying to Buy a Short Sale .

For a free market report on listings and sales in Northern Virginia and with no sales calls from an agent sign up here at MLS Market Snapshot .

Joey Remondino is a full time Realtor specializing in residential homes in Northern Virginia including Prince William. Fairfax. and Fauquier Counties. Trained and experienced in Relocation. Short Sales. REOs , investments. and any other residential real estate Joey can guide you through the home buying or selling process.