Buying a short sale property can feel like scoring a great deal in a red-hot real estate market—but it’s not without pitfalls. As a short sale specialist in Orlando who’s navigated these murky waters with countless clients, I’ve seen buyers either win big or walk away frustrated. The key? Knowing what mistakes to avoid before you even write that offer.
Let’s break down the top 10 mistakes you must avoid when buying a short sale so you can protect your wallet, your sanity, and your time.
1. Not Getting Pre-Approved Before You Start Looking
Think you can make an offer and worry about financing later? Think again.
Short sales require quick action when approval comes through. Sellers and banks want to know you’re serious and financially ready. Without a pre-approval letter in hand, your offer may not even get considered. Worse, you could lose your dream deal to a better-prepared buyer.
Pro Tip: Get pre-approved, not just pre-qualified. It shows you’re ready to move fast, which banks love.
2. Failing to Hire a Short Sale-Savvy Agent
This isn’t your typical real estate transaction. Short sales are a delicate dance involving lien holders, paperwork, and negotiation with lenders. A regular agent might fumble the process.
Hire a short sale specialist who knows the ins and outs—someone who’s closed short sales successfully and understands lender expectations. They’ll be your guide through a frustrating, often unpredictable journey.
3. Assuming a Short Sale Means a Huge Bargain
Sure, the word “sale” is right there in the name—but that doesn’t mean you’ll score a rock-bottom price.
Banks still want to recoup as much as possible. They’ll conduct a Broker Price Opinion (BPO) to determine fair market value before accepting any offers. Go in expecting a fair deal, not a steal.
Realistic buyers win. Dreamers waste time and lose opportunities.
4. Skipping the Home Inspection
Don’t let your excitement over the price distract you from due diligence.
Many short sales are sold “as-is,” which means the seller won’t be fixing anything. And if the home has been sitting vacant or neglected (common in distressed properties), there could be serious issues lurking—mold, leaks, foundation cracks, you name it.
Always get a professional home inspection, even if it’s optional. It could save you thousands down the line.
5. Not Understanding the Timeline
If you’re in a rush to move, a short sale is not your best bet.
Unlike a traditional sale, a short sale can take 60 to 120 days—or even longer—just to get lender approval. That’s not counting the time to close after that.
Patience is non-negotiable. Many buyers give up halfway through or move on to a faster deal. If you understand and accept the waiting game, you’re ahead of the curve.
6. Making a Lowball Offer Without Strategy
Low offers might work on motivated sellers—but short sales have an extra gatekeeper: the lender. And trust me, banks don’t entertain ridiculous offers.
If your offer doesn’t align with the property’s appraised value or Broker Price Opinion (BPO), it’ll get rejected or stuck in limbo. That wastes time and could jeopardize the entire deal.
Here’s a smarter approach: Work with your agent to evaluate recent comparable sales. Make a competitive offer that shows the bank you mean business, but still leaves room for negotiation. That balance is where the real wins happen.
7. Ignoring Junior Liens or Additional Mortgage Holders
Short sales can be complicated by multiple lien holders, like second or third mortgages or even unpaid HOA dues. Many buyers focus only on the primary lender’s approval, forgetting that junior lien holders also need to sign off.
And guess what? These secondary lenders often hold up the process or demand a slice of the pie.
Failing to address them can lead to delays—or worse, a complete derailment of the sale.
What to do? Ensure your agent or attorney checks for any subordinate liens early. Negotiating with all parties upfront smooths out the closing process.
8. Not Being Ready for Potential Repairs or Renovations
Many short sale properties are in poor condition. Sellers in financial distress may not have had the resources to maintain the home properly—or they may have walked away emotionally, leaving behind damage or disrepair.
Buyers who walk in expecting a turn-key home often get disappointed fast.
Plan for surprises. Budget for repairs. You might need to fix HVAC systems, plumbing, roofing, or structural issues. The deal might still be worth it—but only if you’re prepared for what’s behind that front door.
9. Overlooking Title Issues
One of the most overlooked yet critical mistakes is failing to do a thorough title search.
Short sale homes often come with clouds on the title—unpaid taxes, mechanic’s liens, legal disputes, or previous judgments. If you close without resolving these, you could inherit a financial nightmare.
That’s why title insurance is non-negotiable.
Have your agent connect you with a reputable title company early in the process. Make sure they run a complete search and ensure you’re protected before moving forward.
10. Walking Away Too Soon or Losing Patience
Here’s the cold, hard truth: short sales are not for the faint of heart. Deals fall through. Lenders ghost you. Paperwork gets lost. Weeks go by without updates.
Buyers who aren’t mentally prepared often back out just before approval comes through.
But here’s where the gold lies— those who stick it out often land great homes below market value with built-in equity. So don’t give up just because it’s hard. Success in short sales requires patience, persistence, and a bit of faith.
If you’re working with a strong team and following the right steps, you’re in a great position to land a win.
Conclusion: Success Favors the Prepared Buyer
Buying a short sale can absolutely be worth it—but only if you know the terrain. These transactions are anything but typical, filled with hidden hurdles and moving parts. As a short sale specialist, I’ve seen firsthand how informed buyers can walk away with incredible deals—and how unprepared ones end up with regret.
By avoiding these top 10 mistakes, you’ll not only save time and money—you’ll also avoid stress, uncertainty, and unnecessary setbacks.
Approach every short sale with patience, strategy, and the right professional support, and you just might find your real estate diamond in the rough.
FAQs: Buying a Short Sale
1. How long does a short sale usually take to close?
Typically, a short sale takes 60 to 120 days to receive lender approval, plus another 30-45 days to close. Timelines can vary based on how many lenders are involved and how responsive they are.
2. Can I negotiate the price on a short sale?
Yes, but keep your offer within reasonable market value. Lenders review the property’s worth and won’t approve offers far below that number.
3. Are short sales better deals than foreclosures?
Often, yes. Short sales tend to be in better condition than foreclosures, and you get a chance to inspect the home and negotiate before buying.
4. Who pays for repairs in a short sale?
Generally, short sale properties are sold “as-is.” Buyers are responsible for repairs unless specifically negotiated.
5. What happens if the short sale is not approved?
If the lender rejects your offer, you can try to renegotiate or walk away. Having a backup plan or other properties in mind is always smart.
