Short sale has long haul.

Everyone is whispering about "short sales."

What are they? Let me explain.

In my opinion, a short sale is an offering of a property below the amount owed on the mortgage.

For example, a listing down the street comes on the market for $300,000. The tax rolls may indicate that the owner paid $500,000 for this home in 2005. Let's assume that the bank's mortgage on the property is $400,000.

Is this a great deal? Can you purchase this property for $300,000 or less?

Many properties are going on the market and are advertised as a short sale when the lender has not agreed to take less than the full mortgage amount.

This short sale will not go anywhere without communication and agreement from the lender to accept a payoff for less than the actual mortgage amount that is due.

If you make an offer on this type of property, you may wait a long time for it to be presented to the lender, only to learn the lender will not accept an offer less than full payoff.

Your contract for sale and purchase may be signed by the seller, but it will require approval by the lender.

Be cautious and do not waste your time if the lender has not communicated and agreed to take less than the amount owed on the mortgage.

A typical lender is not going to agree to a short sale if the seller has adequate income, is not behind on payments and has equity in other properties and assets.

If the lender is involved and communicating with the seller and the listing agent, then go for it.

You might get a great deal, but be patient. This process can take months.

If the lender now owns the property because the seller did not make payments, and the lender took over the property through the foreclosure process, this property is now offered for sale by the lender.

Do your homework and make sure the price is right for a good value.

Make sure that you, the buyer, have a pre-qualification letter from your lender and have your agent write the offer.

Sellers who bought their homes long before 2005 typically have considerable equity and can offer a hot deal if they are motivated to sell.

Do not limit your looking to just short sales and foreclosures because hot deals are here.

Study the market value using comparable listings and sales in the neighborhood in which you are looking to purchase.

When you see a property offered for less than others, check it out. This could be the beginning of a great deal.

Be wise, work smart, and you will get the best value on your purchase