How to buy a short sale
In a short sale, the owner sells for less than they owe and the lender agrees to take the loss. You make an offer like any listing, then wait for every lender on the home to approve it. Expect it to take longer than a regular sale, and know the lender can still say no.
Updated November 2026. A plain-language guide, not legal advice.
- Who sells it
- The owner, with the lender's approval
- Where you find it
- Usually the MLS, marked as a short sale
- Can you inspect?
- Yes
- The wait
- Often weeks to months for approval
Step by step
The order most short sales go in. Your county's rules and the deal in front of you can change it.
See short sales on the map
Ask what's been sent to the lender
Before you offer, ask the listing agent whether the lender has the owner's hardship package and how many loans are on the home.
Make a clean, realistic offer
The lender compares your price to its own valuation. An offer far below market can sit for weeks and then get rejected.
Wait for approval
The lender orders a valuation, reviews the file and may counter. Every lienholder has to sign off, not just the first loan.
Inspect and close on the approval terms
Once you have the approval letter, finish your inspection and close by its deadline.
What can go wrong
Time
Approval can take months. If you need a home by a set date, a short sale may not fit.
The lender can say no
Or approve at a higher price. Your offer isn't final until the approval letter says so.
A foreclosure date in the background
Some lenders keep the foreclosure moving during the review. Ask whether a sale date is set.
Who you need
Agent who works foreclosures
Sees bank-owned and HUD homes the day they list, and knows which ones sat.
Ask them: How many bank-owned or auction homes did you close last year?
Lender with fast proof of funds
Auctions and bank sellers want proof you can close before they take you seriously.
Ask them: How fast can you send a proof-of-funds letter, and can you close in 10 days?
Title company
Finds the liens that survive a sale before they become your problem.
Ask them: Can you run a title search before the auction date?
Experts we work with
Local agents who work distressed and off-market homes, and a lender to call before you bid. Ask through us and we'll introduce you by email.
Robert Meche
Broker and owner, SWR Group at Keller Williams
Collin County, TX, Dallas County, TX, Denton County, TX, Cooke County, TX
Buying somewhere else? Tell us the county and we'll point you to someone.
Recommended lender
Cole Boren
Branch Manager, CMG Home Loans
Cole has nearly three decades in mortgage lending. He helps buyers plan a purchase around the bigger picture: the cash they keep, the home they own now and the timing of the move.
- What you can qualify for now
- Buying before you sell
- Which loan fits the home you want
Cole Boren, NMLS #384591. CMG Home Loans, NMLS #1820. Equal Housing Opportunity. Licensing varies by state. Check his NMLS record.
Real Estate Intel recommends people we work with. You're free to use any agent or lender.
Questions buyers ask
Why do short sales take so long?
The lender, and any second lender, has to review the owner's finances, value the home and approve the price. Each step goes through a queue.
Is a short sale cheaper than a regular sale?
Not always. Lenders want close to market value. The benefit is usually less competition from buyers who won't wait.
Can a short sale fall through?
Yes. The lender can reject the offer, counter higher, or foreclose before approving. Keep other options open until you have the approval letter.
Does the buyer pay more in a short sale?
Sometimes the lender asks the buyer to cover certain costs. The approval letter spells out who pays what.
Get your county's new short sales every week
New default notices, sale dates and homes that went back to the lender. Free, one email a week.