"Short selling" your home

NORFOLK, Va. - Selling a home "short sale" can keep the worst from happening - foreclosure. "Short sale" means selling your house for less than what you still owe the bank in a mortgage. A potential buyer can get a great deal if the bank agrees. But before you get into a deal that sounds too good to be true, know that the amount of red tape, could be a red flag.

WAVY.com obtained a copy of every active short sale opportunity in the Hampton Roads real estate market. In all, there are 315 home just waiting for the right buyer. See the list to the left of this story.

Our cameras went inside a short sale property on Stuart Street in Norfolk - listing price $220-thousand. Realtor Ryan Finch is the representing agent, he says the owner bought this house as an investment with partners that left him high and dry.

"If he can just get out of this and not owe anything he's happy with just not having that payment and saving him from foreclosure," said Finch.

It sounds relatively easy right? A desperate seller and lets face it, everyone's looking for a bargain, but convincing the bank to pay-off your loan for less than what you owe, that's NOT SO EASY!

Charlee Gowin is President of the Hampton Roads Realtors Association, she told us the term 'short sale' doesn't really live up to its name.

"There's one negotiation that takes place with the seller and then another negotiation that takes place with the lender. A short sale is going to be at least 60 days, probably closer to 90, I've seen some go for 10 months," Gowin told WAVY.com.

That's because if the bank is going to take a financial hit, they're going to want to lessen the blow and hold out for a 'better' offer - translation - they're NOT in a hurry!

"A lot of people think they are gonna get a real steal on a house and that's not always the case," said Gowin.

Here's proof...We found a short sale that went on the market for $130-thousand, it sold for more than $184-thousand.

Gowin says that's likely the result of a bank taking the highest bid on an under-valued listing price, but those golden opportunities are out there. We also found a short sale house with a list price $280-thousand, it sold for $230-thousand; 50 grand in-pocket.

"For people who need to get into a home in a timely fashion or for people who have credit issues, they are not the people who should be looking at short sales," Gowin says.

But knowing the red flags of a short sale, can be the green light to a bargain.  A great rule of thumb is a short sale home inspection. If a homeowner is 'in' or about to default on their mortgage -- there's a chance they'll skip some repairs that may cost you.