what are the risks in purchasing a home that is a short sale

Short sales are increasingly common these days. Bear in mind that at least three parties have to agree on the terms of the purchase: seller, buyer, and lender. 2nd mortgages are particularly challenging for short sales as the 1st lien holder is seldom willing to consent to the 2nd lien holder getting any of the sale proceeds. The biggest issue with short sales is lengthy response times from lenders, I have seen them take multiple months; banks often expect buyers to wait patiently, then to close the loan in a short period of time once sale is approved. IF you are patient and don’t have an urgent need or particular date you need to close by, a short sale may save you a decent amount of money. Just be aware of the process, make darn sure you have a lender and buyer’s agent who are saavy in short sales, and take several deep breaths!