Perhaps you're in the housing market for your first home or a vacation home. With the average home price topping $400,000, you might think home ownership is out of reach. But have you considered a short-sale property?

If you're new to the short sale process, this guide is the first step to becoming a proud homeowner. Buying a home from the short sale process differs from regular escrow real estate. This guide takes you from the first step to getting the keys for a short-sale home.

And if you're a seller in the short sale process, this article is also for you. Knowing what your buyer expects is vital for a successful real estate venture.

WHAT IS A SHORT SALE PROPERTY?

A short-sale property is where the homeowner doesn't have other options but to sell to avoid foreclosure. For example, if a home buyer's mortgage outpaces the home's value, it's time for the short sale process.

The seller doesn't receive total real estate value from a short-sale home. But as a home buyer, you can get a home under fair market value. Also, depending on the bank's approval, the short sale process might close within 30 days, but it can take several months.

STEPS IN THE SHORT SALE PROCESS

The short sale process permits you to choose a real estate agent to represent you as a home buyer. Heartland Abstract has a mini-guide to help you select the right realtor.

Getting Your Finances in Order

If you can't purchase the short-sale property outright, you must get mortgage approval from a lender. Mortgage terms and rates differ for each property. Your mortgage lender determines your eligibility and the amount you need to secure the loan.

Check the Property's Financial Status

A real estate agent's benefit is to do background checks on a short-sale property. Savvy real estate agents will check the property title for a chain of custody. Also, a real estate agent can verify if the property is in foreclosure and other outstanding liens.

If the short sale process closes in your favor, you'll need a changeover in the title. Of course, we pride ourselves on providing comparable title insurance. We also have put together a checklist for fees you can expect for your new title insurance.

The Negotiation Process

The bank lender sends a negotiator to assess the value of the short-sale property. It's wise to submit an offer that matches or is close to the bank's broker price.

Remember, the seller might have many offers to consider. So if you try to lowball the seller, you might not get the property.

The bank might require all involved in this real estate venture to sign an arm's-length document. An arm's length affidavit ensures no previous relationship between the seller and the home buyer.

Also, have your real estate agent check for comparable short-sale property sales. This step is crucial before submitting a proposal to the seller.

The real estate agent will send you a document package if the seller accepts your offer. Here's what you can expect.

1. The short sale property listing
2. The official purchase offer
3. Your pre-approval letter

You can also find other documents related to the short sale process. The final step is the bank's approval.

MORE ON A SHORT SALE PROPERTY

Since 2000, Heartland Abstract has provided incomparable title insurance services for Southeast Pennsylvania home buyers. Home buyers are the only priority, unlike other title insurance companies that put profits first.

Our dedicated also works with both sellers and home buyers. We also work with lenders to help close your home buyer loan.

Contact us for any short-sale property questions you might have. We have the right title insurance if you're buying a home in Pennsylvania.