A short sale is a pre-foreclosure where the bank is willing to entertain offers less than the amount owed on the mortgage. An offer is never guaranteed to be accepted. Banks like to see buyers pre-qualified and having some money down, depending on what kind of loan they are approved for. They usually don't pay for repairs and most inspections, so make sure you know what you are getting into before making an offer. It really pays to have a home inspection done, but of course, it will be at your expense.

If a home goes to foreclosure, the average cost of expenses for the bank is around $60,000.00 plus future upkeep of the property. Banks do not want to own homes, so make the bank an offer before it goes to foreclosure that they can accept. They have brokers in the area give them a price opinion on the home's value in the market, and often take offers that aren't riduculously too far off from that value.