The traditional real estate market has really taken a hammering in recent times. There is a foreclosure crisis, more homes are being repossessed by the day, No matter what plans are being put in place by Federal and State Government, it will be too late for many more home owners to save their property, their credit, and in many instances, the last shreds of their dignity. If you want to know how to buy a foreclosure, keep reading.

The short sale is not legislated, but it is an acceptable business practice. What the home owner does, is ask for permission from his lender to sell the property at less than the amount owed on the mortgage. Hence the name short-sale!

The lender won’t get the full amount, but they certainly may get a great deal more than they might if the foreclosure went ahead. Foreclosures are very expensive, costing in the region of $50,000 and they can take a very long time to complete. In New York for example, it may take up to 18 or 24 months to complete, and in that entire time the debt on this property is a non-performing asset.

There is a way a home owner is able to do this with the help of and investors; in fact there are two ways to arrange a sale in pre-foreclosure. The short-sale and the short-sale buy back.

Ok, so the home owner is in default over his mortgage payments, the foreclosure is impending and they have proven to the bank that they are unable to meet this financial obligation, neither in the short, nor long-term. The lender then gives them permission to sell the property as a short sale.

The home owner has to be careful regarding the investor he uses in a short-sale of a short-sale buy back, because there are many scam artists preying on people who have misfortune of being foreclosed on. So he needs a attorney who is versed in the short-sale process.

The investor wins if he can make a profit, the lender wins if they can get as much of the debt owed on the property sooner than later, and the home owner wins too. They are released from paying a mortgage they can no longer afford in a property with little or no equity and they salvage some of their credit record. Not all of it, but every little bit helps.

Law is being put into place under the new “Obama Plan” which will ensure that approval for short sales is even faster than it has ever been, as this is being seen as a way to improve the foreclosure crisis. How, or whether this will have an affect on this market remains to be seen. The fact of the matter is that it is too late for many home owners to sell, even in a short-sale scenario, and homes as well as credit ratings are being lots right left and center. The input which investors makes into this market, is a very good thing, as at least it sees some turnover happening in the real estate industry.