After writing about short sales making up a major chunk of the Sacramento real estate market and what they are, the next question that follows of course is if short sales are a good deal for the buyer.

The answer is, it depends.

It depends on a lot of things, the most important being of course – will it even go through? I had the unfortunate experience yesterday of having to withdraw one of my listings because the home had two mortgages on it and the first lender could go into auction and sell the home to recover all of their principal. The second note however might not get anything. In other words, the first lender had no motivation to sell short and the second lender was getting nothing anyway.

The other thing the answer to the above question depends on is of course, what are the comps? How much are the comparable properties in the neighborhood selling for? The seller of the short sale may have paid exorbitantly more and the place might not even be worth a look unless it really is a good price for the buyers.

Thirdly, and probably the most importantly, what condition is the home in? Chances are, if the sellers haven’t been able to pay the mortgage, they haven’t been able to make any repairs to the home. How many of these repairs are serious?

If it were me, I would look elsewhere. There are many properties on the market that are not short sales that are still good deals. To look for short sales in particular seems to me a huge undertaking of patience for not a very high return. But if you are determined, they sure are out there!