Anchor Intro: The nation's ongoing housing crisis has many would-be homeowners looking for the bargain of a lifetime. One way of buying cheap is foreclosures; another is with a short sale. What is a short sale and how does it work? Bankrate.com explains.
Voice over 1: One man's loss is another's gain. When it comes to the U.S. housing crisis, truer words were never spoken.
Voice over 2: Foreclosures are one way to theoretically buy low, but another phrase you're seeing a lot these days is short sale. What's a short sale?
SOT: "A short sale is a potential solution for a homeowner that is in financial distress, that would allow them to sell their home for less than the balance of the mortgage."
Voice over 3: So a short sale saves both homeowner and lender the expense of foreclosure. And allows a buyer to pay less than the existing mortgage balance.
Voice over 4: If you want to buy a short-sale property, you can comb county records or pay a specialty Web site.
Voice over 5: But according to someone who does this for a living, buying short sales is no beginner's game because you've got to negotiate with lenders. That can be complicated, time-consuming and frustrating.
SOT: "I would not advise it for a first-time homeowner. I would not advise it for someone who needs a place to live relatively soon because often times the time-lines tend to get very long.
Voice over 6: And long time lines don't work well in falling markets.
Voice over 7: So, while short-selling could be a good strategy for a homeowner in trouble, for would-be buyers? No picnic. Despite what the ads might imply.
SOT: "If they say it's easy to make money in short sales, I wouldn't buy the course because it's just wrong."
Standup: Short sales are lots of stuff you see advertised on the Internet or late-night infomercials -- not as easy as it seems. Still could be a weapon, though in your bargain-hunting arsenal. For Bankrate.com, I'm Kristin Arnold.