How to Buy a Car on Short Saleby Larry Parr
Buying a car on a short sale means that you are paying the seller less than what he or she owes to the lender. A seller behind in car payments and possibly facing repossession may be motivated to sell the car to you for less than the loan amount. As a buyer, you have little to worry about in a short sale, so long as you obtain clear title -- it is the seller who must make a deal with the lender to get a short sale approved.
Place ads on Craig's list and in local newspapers offering to purchase vehicles on short sales. Have the cash to buy the vehicles outright. Learn everything you can about the current market value of any vehicle you are interested in purchasing.
Work with sellers who must convince their lenders to allow the short sale. This could mean placing cash for the purchase in an escrow account. Escrow instructions must include the fact that when the escrow closes, you will receive full and clear title.
Pay the agreed-upon price as soon as the lender OKs the short sale. Make certain the price is the one agreed to -- if not, back out of the deal. Make certain that you obtain full title in your name alone at the time the vehicle is paid for.
- Never turn over cash for a short-sale vehicle unless the seller's lender is prepared to hand over a clean (unencumbered) title in your name.
- Beware of dealerships that advertise a vehicle for one price and then adjust the price to cover the cost of a short sale at the last minute.
Items you will need
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