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The traditional real estate market has really taken a hammering in recent times. There is a foreclosure crisis, more homes are being repossessed by the day, No matter what plans are being put in place by Federal and State Government, it will be too late for many more home owners to save their property, their credit, and in many instances, the last shreds of their dignity. If you want to know how to buy a foreclosure, keep reading.

The short sale is not legislated, but it is an acceptable business practice. What the home owner does, is ask for permission from his lender to sell the property at less than the amount owed on the mortgage. Hence the name short-sale!

The lender won’t get the full amount, but they certainly may get a great deal more than they might if the foreclosure went ahead. Foreclosures are very expensive, costing in the region of $50,000 and they can take a very long time to complete. In New York for example, it may take up to 18 or 24 months to complete, and in that entire time the debt on this property is a non-performing asset.

To go into all the processes happening in the foreclosure market would take a great deal more space than we have available, so for now we shall stick to the short sale and how it is possible to buy a foreclosure.

A short- sale has to be authorized by the lender which owns the lien over the home owners mortgage. It can only be authorized once the mortgage has gone into default and the home owner is able to impress upon the lender that he is encountering serious financial difficulty. This is not that hard to prove if serious financial difficulty is being experienced.

Potential investors contact banks, home owners and realtors to find out about short sales, and there are many of these. They find out if this deal would be profitable for them, if it is and they can create a win-win situation for all parties involved, the deal goes through.

The investor wins if he can make a profit, the lender wins if they can get as much of the debt owed on the property sooner than later, and the home owner wins too. They are released from paying a mortgage they can no longer afford in a property with little or no equity and they salvage some of their credit record. Not all of it, but every little bit helps.

Law is being put into place under the new “Obama Plan” which will ensure that approval for short sales is even faster than it has ever been, as this is being seen as a way to improve the foreclosure crisis. How, or whether this will have an affect on this market remains to be seen. The fact of the matter is that it is too late for many home owners to sell, even in a short-sale scenario, and homes as well as credit ratings are being lots right left and center. The input which investors makes into this market, is a very good thing, as at least it sees some turnover happening in the real estate industry.