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The answer depends on whether you are buying or selling.
However, for both parties, the main issue is the length of time it takes for the owner's lender to approve the sale. You could wait may months (usually 1-2 months, sometimes as long as 6 months) to receive an answer from the lender - and that answer may be a denial.
During this time period, unfortunately, many buyers will walk away and/or find another property to buy.
Also, a short sale will have an effect on the seller's credit, though not nearly as much as a foreclosure.
Occasionally, with short sales, the lender will require the seller to sign an unsecured note to pay off the unpaid balance in the future.
If it's an investment property, the seller may owe taxes on the shortage (you should check with your tax advisor for more information, regardless of whether it is your primary residence or an investment property).
The primary benefit of a short sale for the seller? You may be able to avoid foreclosure.
There are many pitfalls with a Short Sale.
1) Your Agent or Listing Agent or both do not know what they are doing.
2) Prolonged contract period (4-6+) months.
3) Because of contract period. Price you agree on today might be ok, but by the time you close property is already worth less then what you are purchasing for.
... and, it's free and anonymous
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What are the disadvantages of a short sale?
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