With the National market in flux and certain segments of our local market slowing, buyers are looking for ways to save money and sellers are looking for a way to get out of trouble. Those two goals sometimes intersect with something called a short sale. A short sale is where a Lender agrees to let a seller sell their home for less than what is owed on the property. That is the basic idea but the reality is more complicated and the process often times takes quite a bit longer than a traditional 30 day close.
I have spoken with quite a few agents who handle short sales and bank owned properties and the consensus has been that in Portland you don’t really get a great deal and it takes in many cases 5 months to close. This is because Oregon is very under-represented when compared to the rest of the country in foreclosures and other distressed types of sales and this means that those properties often sell for close to market value. On the flip side I have clients that have bought properties for much less than market value. I think it has much more to do with the amount of inventory that bank currently holds versus the specific market.
The bottom line is that you need to talk with a Real Estate Attorney, a CPA, and an experience Realtor before you decide to enter into a short sale.