Buying A Short Sale Home
A short sale is a home the seller is selling for less than they owe their lender. At least one conventional program and at least one VA program we offer can finance it when the sale meets a short list of rules.
What a short sale purchase requires
Each item below is a requirement of at least one program we offer.
- The sale must be arm’s length, with a real estate agent and a formal sales contract.
- You cannot have any relationship or identity of interest with the seller.
- Every existing mortgage lien holder must provide a short sale approval letter accepting the discounted price.
- All liens on the home must be paid off with the sale proceeds.
- Your earnest money must be verified with a bank statement or bank printout, regardless of amount.
- You cannot take part in the seller’s negotiations with the lien holders.
Conventional and VA options
Every lien holder signs off
You may pay seller fees
Past-due taxes or HOA dues
Every fee in writing
Liens cleared from the sale
What Is A Short Sale Purchase?
It is buying a home from a seller who is selling for less than the amount owed to their lender.
The seller’s mortgage lien holders agree to accept a discounted price. Under at least one program, every existing mortgage lien holder must put that approval in a letter, and all liens must be paid off from the sale proceeds. At least one conventional program and at least one VA program we offer treat buyers in this spot as generally eligible when those rules are met.
Sometimes the seller’s side asks the buyer to cover costs the seller or another party normally pays, like a short sale processing fee, a payment to a second lien holder, or past-due property taxes or HOA assessments. Fannie Mae allows this. You must get written details of the extra costs, and the servicer gets them too and may renegotiate its payoff.
This page is about buying someone else’s short sale. If you sold your own home through a short sale and want to buy again, see our mortgage after a short sale page.
Why choose Saxton for a short sale purchase
This page is for buyers who found a home listed as a short sale and want to know what the loan needs.
Know The Rules Early
We walk through the arm’s length, seller relationship and lien holder rules with you before you commit, not after.
Conventional Or VA
At least one conventional program and at least one VA program we offer list short sale purchases as generally eligible.
Earnest Money Paper Trail
Your earnest money must be verified with a bank statement or bank printout from when the check cleared, regardless of amount. We tell you what to keep.
You Stay Out Of Negotiations
The seller and the lien holders work out the payoff. Under at least one program, the buyer cannot be involved in those negotiations.
Extra Fees In Writing
If you agree to pay a cost the seller normally covers, you get written details, all parties sign off on the final terms, and the cost appears on the Closing Disclosure.
Concessions Counted Correctly
If any part of a short sale processing fee you pay is reimbursed by an interested party, it is treated as a sales concession.
Hear From Homeowners Like You
Frequently Asked Questions
Straight answers about buying a short sale home.
It is a home the seller is selling for less than the amount owed to their lender. At least one program we offer requires an approval letter from every existing mortgage lien holder accepting the discounted price.
At least one VA program we offer lists short sale purchases as generally eligible. The same rules apply: an arm’s length sale, no relationship with the seller, and an approval letter from every lien holder.
It depends on the program. At least one program we offer requires no relationship or identity of interest between you and the seller on a short sale. If you know the seller, see our non-arm’s length purchase page for other options.
Not under at least one program we offer. It requires that the buyer not be involved in negotiations with the lien holders to make the short sale happen.
Fannie Mae allows buyers to pay fees that are typically the seller’s responsibility, including short sale processing fees. You must get written details, and the settlement statement must list it. If an interested party reimburses any part of it, it is treated as a sales concession.
Yes. Fannie Mae lists payment of delinquent taxes or delinquent HOA assessments as an allowable extra payment when buying a short sale. The servicer gets written details and may renegotiate its payoff.
At least one program requires a bank statement or bank printout from when the earnest money check cleared your account. That applies regardless of the amount.
Find out what you qualify for
Tell us about the short sale home you found and we will show you the options that fit.
Get Pre-Qualified- Consumer Financial Protection Bureau, buying a house: tools and resources for homebuyers
- Consumer Financial Protection Bureau, mortgages
Loan amounts, rates, terms, and eligibility are subject to credit approval, asset and income verification, appraisal, and program guidelines. Draw requirements and variable rate terms apply. Program availability varies by state. Not all applicants will qualify. Saxton Mortgage, LLC is an Equal Housing Lender.