Buying a Short Sale in Washington: A Reality Check
Short sales can be real value, but the lender — not the seller — controls the deal. What approval delays look like and who should actually attempt one.
A short sale is a home sale where the proceeds won’t cover what the seller owes, so the seller’s lender must agree to accept less than full payoff. The seller still owns the home and still signs the deal — this is not a foreclosure — but a third party with no emotional investment and no urgency holds the real veto.
That one structural fact explains everything strange about short sales: the timelines, the dead deals, the bargain pricing that sometimes isn’t real. Here’s the honest version, in the form of the questions buyers actually ask.
”Is a short sale a good deal?”
Sometimes. Short sales often list below comparable homes — partly genuine motivation, partly agents pricing low to attract an offer the bank can consider, and partly compensation for what you’re about to read. But understand: the list price is not an approved price. The seller can accept your offer tomorrow; the lender can come back months later demanding more, based on its own valuation. A “deal” that evaporates in month three cost you a quarter of a house-hunting year.
The realistic framing: a short sale trades your time and certainty for a possible discount. Whether that trade makes sense depends entirely on the next question.
”How long does it actually take?”
This is where short sales earn their reputation. A normal Washington purchase runs offer-to-closing in weeks. A short sale adds a lender-approval stage that commonly runs months — and “months” is genuinely unpredictable, because it depends on:
- How many liens need approval. One lender is slow; a first and second mortgage (plus maybe an HOA lien or tax lien) means every party must take a haircut, and each negotiates separately. Multi-lien short sales fail at a much higher rate.
- Whether the seller’s hardship package is complete. Lenders won’t engage until the seller documents financial hardship. A disorganized seller stalls everything before your offer is even reviewed.
- The lender’s internal valuation. The bank orders its own opinion of value and negotiates from that, not from the list price.
- Whether anyone at the lender is in a hurry. Nobody is.
While you wait, you’re in limbo: the listing may stay active, other offers may be submitted to the lender alongside yours depending on how it’s handled, and the seller’s foreclosure clock may still be ticking in the background. Some short sales literally race the auction date.
”Can I keep my protections?”
Mostly, yes — and this is the genuinely good news versus a trustee-sale auction. A short sale is still a normal purchase contract: you can have an inspection contingency, a financing contingency, and title review. Washington’s standard short-sale addendum also makes the whole contract contingent on lender approval, which protects both sides while you wait.
Realities to layer on top:
- The house is sold as-is in practice. The seller has no money — that’s the premise — so repair negotiations usually go nowhere. Inspect to decide whether to proceed, not to build a repair-credit list. Knowing what a thorough inspection covers matters more here, because the house has often had lean years of maintenance too.
- Your earnest money timing is negotiable. Many buyers structure deposits so little or nothing hard is at stake until lender approval arrives. Get advice on this; earnest money norms bend in short sales.
- You can usually walk before approval. Until the lender approves, most short-sale contracts let the buyer withdraw. The trap isn’t being locked in — it’s the sunk months.
”Who should actually attempt a short sale?”
A short sale fits you if all of these are true:
- You have no deadline. Renting month-to-month, flexible timing, no school-year or job-start constraint. If you must move by a date, do not build your plan on a lender’s queue.
- You can keep shopping emotionally. The healthiest short-sale buyers treat it as a lottery ticket running in the background while they stay open to other homes.
- The discount is real and priced for the wait. Run the comps yourself. A short sale priced at market value offers you the delay without the reward.
- Your agent has closed short sales before. The seller’s side matters even more — an experienced listing agent or third-party negotiator who knows how to package the hardship file is the best predictor of the deal surviving. Ask directly how many short sales each agent involved has closed.
If you have a lease ending, a relocation date, or first-time-buyer nerves: buy a normal listing. The few-percent discount is not worth your timeline.
”What goes wrong most often?”
In rough order: the lender counters above what the buyer will pay; a second lienholder refuses its haircut and the deal dies; the approval arrives but with conditions the seller can’t meet; the buyer finds another house in month two and exits; or foreclosure overtakes the negotiation. None of these are anyone cheating — it’s just what happens when a deal needs a yes from a party that loses money by saying it. Knowing when to walk away from a stalled deal is half the skill.
The bottom line
Short sales are legitimate, lawful, sometimes-great purchases with one defining feature: the bank’s calendar is the deal’s calendar. Go in with no deadline, hard comps, an experienced agent, and a willingness to lose the months — or don’t go in.
And since agent experience is the variable you control most directly: Manaky Homes is a free marketplace where Greater Seattle agents publish their fees and service models side by side, which makes it easier to find — and compare the cost of — the kind of representation a deal like this needs. Sign up for early access if that’s useful to you.
