A short sale of a home takes place when the homeowner has an urgent need to sell a home due to some financial shortcomings, while the amount owed on the home to a mortgage or other lender is more than its appraised value.  Short sales in MD require approval from the original lender, and as they will be holding the property papers, there is no way this can be avoided. The homeowner will have to convince the lender that there is a real hardship that is requiring them to short sell house. This hardship can be a result of the loss of jobs, health issues, and divorces, which are reasons that can find acceptance with lenders. 

Lenders require a lot of financial information in the form of bank statements, pay receipts, retirement accounts and other assets before they can give approval for any short sale. This can be submitted to the lender along with any offer from a buyer for the sale of the home. Lenders will again ask for appraisals of the property to ensure that the value offered in the short sale is close to the market value. Appraisers depend on information of recent sales in the neighborhood, and also the condition the property is in. Lenders will not accept any short sale value that is less than 90 percent of the appraised value.


Time frames for closing a short sale can vary and will depend on the lender and their approval processes. The longer the period, the lesser are the chances of getting a good value. Homes that have additional mortgages on a property can lead to still greater delays. Lenders can refuse a short sale if they find the borrower has sufficient assets that can be liquidated to pay for the home.


Investors are a good source for locating parties that would be interested in short sale homes. They will buy these properties at a rate lower than the market value and hope to profit by selling them immediately by flipping them. Owners continue to be liable to make up the difference between the amount owed to them and the value of the short sale. Some banks may absorb the difference so that the property is not foreclosed.     


Buying a short sale home requires identifying a home that is likely to go into foreclosure. You then need to find out the true worth of that home and make an offer that is near to that amount, though you can take advantage by offering a slightly lower value. If the offer is accepted, you then need to get the current homeowner to complete all the formalities of a short sale. There are real estate agents who can greatly help in easing this process, though their services will have to be paid for. You need to be able to prove your financial capacity to complete the sale before you can be taken seriously by the seller or his agents. Be prequalified for a loan or arrange for the required amount of cash from your other assets.