5 Tips for Purchasing a Short Sale Property

Don't Get Caught by Expensive Surprises

A successful short sale could mean you're getting an amazing deal and paying far less on a piece of property than it's worth, and everybody else is walking away happier for your participation, as well. Be very certain about what you're purchasing, though, as hidden costs could eat very quickly into your perceived profit.

First and foremost, do a thorough title search before making an offer on any pre-foreclosure property. There may be debt attached to the property that you'll be obligated to pay, including any liens and associated fines, late association fees, older mortgages and even late utilities. Be sure you do a thorough inspection of the exterior and interior to know what repair expenses you're likely to pay to make the home habitable. Also, find out if any home improvements are subject to city approval. If a certificate of occupancy was either not filed after an improvement or was rejected, you'll adopt those obligations.

A number of these unexpected expenses could completely wipe out any profit you can expect from a short sale, so be sure to do your homework.