Short Sales Can Be an Opportunity to Buy Again Sooner Than You Think

3 min read

Many people assume that completing a short sale means waiting years before they can own a home again. In reality, under the right conditions, a short sale seller can become a buyer almost immediately. Here is how it can work.

When You Can Be a Buyer Right Away

If you have extenuating circumstances, it may be possible to become eligible for a new home purchase soon after a short sale. Lenders generally recognize a specific list of qualifying situations.

• Loss of the home due to a serious medical condition, such as cancer, a heart attack, or the illness of a child.
• Divorce involving special circumstances, such as a restraining order.
• A forced job transfer.
• An innocent spouse, where the non-buying spouse had a short sale of a non-primary residence.
• The death of a wage-earning spouse.

What You Need to Qualify

In all of these cases, the buyer must have reestablished credit, typically with a minimum of three trade lines and no late payments after the short sale. They must also demonstrate that they can comfortably afford the new home.

Some of these purchases can even be done with full financing, though that option is generally restricted to eligible rural loan areas and comes with income limits. These loans must be carefully planned and executed, and they require ironclad proof of any claim of an extenuating circumstance.

The takeaway for both homeowners and the agents who serve them is this: a short sale does not have to be the end of the road to homeownership. With the right planning and documentation, the path back can be much shorter than most people expect.