In 2025’s competitive and costly housing market, short sales offer patient buyers a chance to purchase homes at a significant discount. While the process can be slow and complicated, experts say the savings are among the best still available this year.
A short sale happens when a home is valued less than what the current owner still owes on the mortgage. In these cases, the lender allows a home sale for less than the outstanding loan balance, most often due to financial issues they may be having. While some may confuse this with foreclosures, there is a difference. Short sales are voluntary and give lenders a possibility of preventing greater losses and debilitating legal fees.
According to a 2024 report from Zillow, short sales during this past year sold well below listing price (10–12% on average), while foreclosures sold for 5%-7% below and traditional home sales only offered 3%-5% off. With inventory down 10% year-over-year, according to Redfin, this means that the opportunity for meaningful discounts is increasingly rare. However, the one possible silver lining seems to be that short sales continue to stand out.
Even then, the process takes time and requires patience. Multiple parties (banks, mortgage servicers, private investors, and even government programs like the FHA to name a few) must approve the deal before it goes through. Each of these entities has its own criteria and time schedules for approval. As one would fear, delays are frequent, particularly if the mortgage has been sold or insured.
In these cases, while homes are typically listed close to market value, buyers can often negotiate significantly lower prices. Experts recommend starting offers at just under the asking price (8%-15%), taking into consideration the home’s condition and current local market dynamics. While lenders do not want prolonged negotiations, you should not be surprised if they counter your offer at least once or twice before making a final decision.
If an offer is rejected, buyers can try again. You can even take a few weeks and then resubmit a similar or revised offer, which is especially a good strategy if the home has not sold or if the lender’s priorities have shifted.
Buyers interested in short sales must stay alert. It is important to track listings closely, so that you can be ready to jump to action when you see a short-sale property pop up. Once you have made your initial move and the process has officially begun, that is where the patience really comes into play, as you will most likely experience a long waiting game, marked by constant requests for more and more paperwork, and even frustrating or confusing lags/lapses in communication as lenders review all offers on the table.
Even with all of these challenges listed, short sales can save a ton (tens of thousands of dollars, in fact), making them one of the last feasible ways to buy a home below market value in 2025.
