How to Buy a Short Sale in Lake Tahoe — Buyer’s Guide

Q: What should you know if you’re looking to buy a short-sale property in Lake Tahoe?

A: Buying a short sale in Lake Tahoe can present a bargain, but it requires patience, lender approval, and realistic expectations about timing and condition.

What Is a Short Sale and Why It’s Relevant in Tahoe

• A short sale occurs when a homeowner owes more on their mortgage than the home’s current market value, and the lender agrees to accept less than the outstanding loan amount to release the lien.
• This allows the homeowner to avoid foreclosure while giving buyers a chance to purchase potentially below market value.
• In the Lake Tahoe market, short sales and other distressed sales such as foreclosures and bank-owned properties do exist, but they are much less common than typical listings.

Because inventory is limited, many buyers end up purchasing standard listings. However, when a short sale does come up, the potential price discount may make it worth the extra effort.

The Short Sale Buying Process in Lake Tahoe

1. Find a short-sale listing
   These may be labeled as short sale, short sale/contingent, or pre-foreclosure/short sale in the MLS or local real estate databases.

2. Make a strong, pre-qualified offer
   Since the lender must approve the sale, it helps to be preapproved for a loan or have cash ready to show you are serious and able to close.

3. Seller and lender review
   Once the seller accepts your offer, it is submitted to the lender or loan servicer. The lender reviews the short sale package, which includes your offer, the seller’s hardship documentation, comparable market data, and a net proceeds worksheet.

4. Lender decision
   The lender may approve the sale as-is, request additional funds, or reject the offer if it does not meet their loss mitigation thresholds.

5. If approved, close escrow
   Once approved, closing proceeds much like a standard sale. Expect the home to be sold as-is, limited seller disclosures, and usually no proceeds paid to the seller.

Because approval depends on lender willingness, timelines tend to be longer and less predictable than a normal sale, often taking several weeks or months.

Pros and Cons of Buying a Short Sale in Tahoe

Pros
Potential to buy below market value, providing equity or savings compared to standard listings.
Short-sale properties are often better maintained than foreclosures because owners usually still live in the home during the process.

Cons and Challenges
Limited short-sale inventory in Tahoe.
Uncertain timelines, as lender approval can take a long time and some offers may never be approved.
Homes are typically sold as-is, with limited disclosures and possible repair costs.

Tips to Increase Your Chances of Success

Be preapproved or have cash ready, as lenders prefer buyers who can close quickly.
Work with a real estate professional experienced in short sales, as the process is more complex than a typical transaction.
Be patient and realistic about timelines and lender negotiations.
Understand the property’s condition by completing inspections and due diligence whenever possible.
Do not overlook traditional listings, as competitively priced homes can still offer excellent value.

Bottom Line

Buying a short sale in Lake Tahoe can be a valuable opportunity, but it is not for everyone. It requires flexibility, patience, and realistic expectations. For buyers willing to invest the time and effort, a short sale can be a smart way to enter the Tahoe market at a discount.

If you would like to explore short-sale opportunities or see what is currently available, I am here to help.

Lisa Valentine, Broker (CA and NV)
775-292-0809
lisa@lisasellstahoe.com

Ready to guide you through the Tahoe short-sale or traditional homebuying process and help you find your next home on or near the lake.