N Kedzie Ave
Chicago, IL 60618

Here is how to proceed:

• Contact the property owner and get as much information as you can about the sale. How much is owed on the loan? How much is the lender willing to accept for a release? How much time do you have before the property is no longer available because of foreclosure action?
• If these questions are answered favorably, you will structure a tri-party contract so that you, the property owner, and the lender are all in agreement. You need to agree on when the closing will occur, how much is being paid, and how the money will be distributed at closing. Such agreements may be complicated and should be drawn up by an experienced real estate attorney.
• Just because the lender is agreeing to a short sale, that does not necessarily mean that the amount it is willing to accept is a good price. Some properties have been over-financed and the short sale amount could be higher than the property value. For this reason, you still need to hire a qualified real estate appraiser so you will know for certain the deal is a good one for you.
• As in any real estate transaction, the property should be inspected at least for the soundness of the roof, electrical and mechanical systems, mold and other environmental concerns, infestations, and air conditioners and heating systems. (Please keep in mind that the owner may still be living in the property and their privacy should be respected)
• Also, because the short sale is being structured between yourself, the property owner and the lender, you still need to have the title checked to make certain your interest and the interest of your own lender are protected. Short sales occur out of a hardship on the part of the property owner and motivation of the lender to not take title to the property. The property owner’s financial distress may have resulted in other liens, so it is important to know the condition of the title.
• At least sixty days prior to the closing date get your mortgage financing secured so you will be ready with the funds when it is time to close on the sale.

Short sales can create opportunities to save big on the purchase of a property. Such agreements are entered into between a purchaser, a property owner, and the lender. Even though by definition a short sale means the lender is accepting less than the amount owed on the mortgage loan, it is not a certainty that the property is being purchased at a below market price. For that reason, you must still perform the same due diligence as you would on any other real estate transaction. The professional services of an appraiser, property inspector, and title agent are advised when structuring a short sale.

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