Could I purchase my parents home that will be a Short Sale?

[Mandeep Randhawa]

hello guys,

Sorry for such a rookie post. I did google around and didn't find too much help so I thought I would ask here. My parents home will be a short sale pretty soon. Is it possible for me to purchase the home. I have perfect credit and make good money. I do live in that house currently.

Thanks again,
Manny

[Jon Holdman]

If you're thinking, "is there some way we can do a short sale and still let my parents stay in the house", then the answer is no. In exchange for eliminating this debt, they're going to lose the house and suffer significant damage to their credit. The lender has an actual monetary loss. So, both feel pain.

Now, you say something there that I don't fully agree with. Just because they're upside down isn't necessarily a reason to do a short sale. Everyone who buys a new car with a loan is probably upside down the minute they drive off the lot. Yet, they're happy with the car and their payments, so its just part of the deal. So, if you're parents were happy with the house when they bought it, were happy with the payment, and can afford to stay there, why sell at all?

For many folks, that's not a choice. They got in over their head with ARMs or other tricky loans and can no longer afford the house. Or someone lost a job. Or suffered an expensive medical problem. Or some other hardship. So, they're forced to sell.

And other folks decide they're so far underwater that they just don't want to spend a fortune making payments. So they do some form of strategic default and suffer the consequences of walking away from a debt. Opinions vary on the morality of that choice. I can see both sides, and for families that are deep underwater, the pain of a foreclosure or short sale may be acceptable vs. decades of high payments.

But just by itself, being underwater isn't really a reason to walk away.