Should You Buy a First Time Home in a Short Sale?

This brief mortgage minute video is addressed mostly to first time home buyers and answers the question “Should you buy a home that is being sold short?” This occurs when the owner owes more to the lender of the mortgage than the actual appraised value of the home.

As an example, consider a home you are interested in as a new home buyer that is listed at $150,000. However, the present owner owes almost $200,000 to the mortgage provider (e.g. a bank). Before you can purchase the house, aside from you, both the bank and the seller must agree with selling the home short, or at a loss.