There are approximately 3,000 Short Sales and Bank Owned Properties on the market in the Tampa Bay Area.

If you want to pursue this type of property, it's a good idea to have an understanding of the differences between Short Sales, Bank Foreclosures and regular sales.

A Short Sale property is offered for sale by an owner, who can not longer make his mortgage payments and owes more on the property than it's worth.  He contacts the bank and the bank agrees to accept a lower payoff on the mortgage than is owed. Banks do this to avoid the expensive process of foreclosure and post foreclosure aggravations of having to maintain the house until they sell it to a new buyer.

Pre-foreclosure means the seller has stopped making payments or is behind in his payments but still has legal title and ownership of the property, can list it for sale and entertain offers.   A seller in this status of ownership may have incurred unknown fees, so he could be uncertain about how much he will receive at closing.  The pre-foreclosure seller may be quite motivated to sell the property which may be listed in the lower range of market value.  These are good properties to consider, especially if the seller has plenty of equity (loan to value ratio.)  He may be willing to sell at a below market price to save his credit and avoid the risk of losing everything to foreclosure.

Foreclosed properties are owned by the bank following the lengthy court procedure during which they acquired title to the property via a Certificate of Title.

These are popular methods for buying a house and there are lots of them to choose from--approximately 3,000  in the Tampa Bay Area MLS.  However, this method is fraught with potential risks and challenges.

A Short Sale may be a multiple offer situation, and the winning offer?  It's accepted by the bank and the seller.  Patience is required for this type of purchase because the bank may sit on the offer(s) for a month or more waiting for better offers to come in or just due to bureaucracy. You can't be in a hurry to move because you just closed on a house and need a place to stay. Even after accepting the offer, the bank can change it's mind and proceed to foreclosure causing you to lose money you spent on an inspection or survey.

Short Sales and foreclosures are likely sold "As Is" with right to inspect.  The bank or distressed seller in the case of a short sale won't make any repairs. There is usually costly deferred maintenance, missing appliances and sometimes vandalism in the case of foreclosures. 

Are you good at Math?  If it looks like bank owned properties sell for less money there is good reason.  You must be able to compare and contrast the value of a higher priced but well-maintained property versus the cost of repairs to a lower priced, but neglected bank owned property.  It can be tricky.  People tend to underestimate repair costs and the time necessary to complete the repairs.

Banks add an addendum with special clauses to the sales contract--the clauses are written by their attorneys and are--you guessed it, all in their favor.  It is important to read and understand these clauses because they alter and/or negate some provisions of the sales contract.

There are some good buys to be had if you are patient, a risk taker and are willing to make multiple offers to get the property you want.  Be sure to seek the assistance of a knowledgeable lender and Realtor.