Header photo: Nashville from Shelby Park, by Antony-22, CC BY-SA 4.0, via Wikimedia Commons. Resized.
Quick answer (as of October 2026): When you buy a short sale, the seller's lender has to approve your price and terms before you can close, so you're really waiting on two yeses: the seller's, then the lender's. Expect the lender's answer to take weeks or months, expect to buy the home as-is, and write a deadline for lender approval into your contract along with what happens to your earnest money if it doesn't come. On an FHA loan, everyone who signs the contract also signs HUD's Pre-Foreclosure Sale Addendum, and the sale has to be arm's length.
You found a house in Franklin, Thompson's Station or Spring Hill that fits, the price works, and the listing says the sale is subject to the lender's approval. You want to know whether it's worth the wait and what could go wrong.
I've been on the listing side of two recent short sales in Columbia, so I've watched buyers go through this from the seller's side of the table: one buyer walked after the inspection, and the next one closed. Here's how buying a short sale works in Williamson and Maury counties, where it gets risky, and how to write the contract so you're protected.
What does it mean to buy a short sale home?
Buying a short sale home means buying from a seller who owes more than the house will sell for, where the seller's lender agrees to take less than the payoff and release its lien. The seller can sign your contract, but the seller can't give the final yes. The lender approves the price, the closing costs and the terms.
On a Fannie Mae loan, the sales contract has to make the sale contingent on the lender's agreement, and the mortgage insurer's if there is one. Even if the seller and you agree on everything, the lender can still counter or decline.
How does buying a short sale work, step by step?
- Get preapproved, and ask your lender how long it can hold your approval and your rate.
- Make an offer. The contract makes the sale subject to the seller's lender approving it.
- The seller signs, and the listing agent sends your contract to the seller's lender with the seller's financial package.
- The seller's lender values the house. On an FHA loan, it orders an as-is appraisal from an FHA roster appraiser. On a Fannie Mae loan, the servicer orders a valuation from Fannie Mae.
- The lender approves, counters or declines. If it counters, you decide whether to meet it.
- You do your inspection and your own lender's appraisal, on the schedule your contract sets.
- You close by the date in the lender's approval letter.
The seller's side of these same steps is in the short sale process, step by step.
How long does it take to buy a short sale?
There's no standard number, and the lender's review is what sets the pace. The rulebooks give you the floor:
| Stretch | FHA loan (HUD) | Fannie Mae loan |
|---|---|---|
| Before offers are reviewed | Listed in the MLS at least 15 days after the seller's approval to participate | No set minimum stated |
| After your signed contract | Servicer sends the seller form HUD-90051 within five business days | Servicer acknowledges the offer within five business days |
| Lender decision | Seller has four months from the approval to participate to get a contract | Written approve, counter or decline within 30 calendar days of a complete package and the offer |
| Closing deadline | Set in the approval | Within 60 calendar days of approval unless Fannie extends it |
From the listing side, two real buyers waited this long. On my first Columbia file, the second buyer's contract went to the servicer at the same price as the first, approval came 16 days later, and closing came 55 days after approval. On the second file, it was 90 days from accepted offer to closing, and closing came two days after approval. The day by day is in How Long Does a Short Sale Take in Tennessee?
What are the risks of buying a short sale home?
The main risks are time, condition and a lender that can say no. Here's how each one shows up and how to protect yourself:
| Risk | How it shows up | How to protect yourself |
|---|---|---|
| The lender says no or counters | The seller's lender can decline your price or ask for more | Know your ceiling before you offer, and keep looking until you have an approval letter |
| It takes longer than your life allows | A lease ends, a rate lock expires, or a home sale of yours closes first | Ask your lender about lock extensions, and put an approval deadline in the contract |
| As-is condition | On an FHA short sale, repair reimbursements or allowances can't come out of the sale | Inspect, budget for repairs yourself, and don't count on a repair credit |
| Limited seller help | In both of my Columbia files, the servicer held help toward the buyer's closing costs to 3 percent of the price | Ask what the lender will allow before you write it into the offer |
| Contingencies that slow the closing | On FHA, the servicer checks that there are no contingencies that might delay or jeopardize a timely settlement | Expect pushback on a contingency tied to selling your current home |
| Other liens | A second mortgage, HELOC or HOA balance has to be cleared too | Ask the listing agent early whether there's more than one lien |
| Resale limits | On a Fannie Mae short sale, the deed bars you from reselling for 30 days, and for more than 120 percent of the price until 90 days after closing | Plan to own it, not flip it |
The second lien problem is its own topic. It's covered in second mortgages, HELOCs and deficiency in a Tennessee short sale.
How do earnest money and contingencies work on a Tennessee short sale contract?
If your offer is written on the Tennessee REALTORS Purchase and Sale Agreement, form RF401, the form sets when your earnest money is due and who holds it, an inspection period and a resolution period measured in days you negotiate, a financing contingency, and a special stipulations section that controls if it conflicts with the rest of the form.
On a short sale, the standard form needs a few added terms:
- The sale is subject to the seller's lender approving it in writing, by a date you pick.
- If approval doesn't arrive by that date, you can terminate and your earnest money comes back to you.
- When your inspection period starts. Some buyers inspect right away; others want the clock to start when the lender approves, so they don't pay for an inspection on a deal that never gets approved.
- What happens if the lender counters: you can accept, counter back or walk.
The exact wording matters, because your earnest money depends on it. Have a Tennessee real estate attorney look at the special stipulations if you're unsure. In my first Columbia file, the first buyer terminated after the inspection; I had the next buyer's agent on the phone the same day and a new contract three days later.
What paperwork does the seller's lender make a buyer sign?
On an FHA short sale, every party signs HUD's Pre-Foreclosure Sale Addendum: the buyers, the buyer's agent, the sellers, the listing agent, the closing agent and any facilitator. The sale has to be arm's length, which HUD defines as a sale between unrelated parties at a price and on conditions that would prevail in an open market, with no hidden terms or special understandings. In my first Columbia file, the servicer sent the addendum along with an arm's length affidavit for signature with its approval package.
On a Fannie Mae short sale, all parties sign a Short Sale Affidavit, Form 191, at closing, and the deed carries the resale restriction described above. VA files run on VA's own rules; see my VA compromise sale page.
What that means for you: no side deals. No promise to rent it back to the seller, no cash outside closing, no agreement to sell it back later.
How do you find short sale homes in Williamson and Maury County?
Short sales are listed on the MLS like any other home, and the listing agent usually discloses that the sale is subject to lender approval. The simplest way to see them is a saved search that alerts you the day one is listed. I'll set that up for you for Franklin, Thompson's Station, Spring Hill or anywhere else in the two counties.
Check the county before you fall for a house. Spring Hill and its 37174 ZIP are split between Williamson and Maury, and the side of the line decides the property tax rate and the school district. My Spring Hill property tax page has the 2026 rates for each side. The local angle on short sales in these three towns is on my Franklin, Thompson's Station and Spring Hill short sale page.
Should you buy a short sale house?
A short sale can work when your timing is flexible, you can buy as-is, and you're not tied to a lease end or the sale of another home on a fixed date. It's a harder fit when you need to close by a specific day, because the seller's lender controls the calendar. Run your cash to close through my buyer closing cost calculator before you offer, so the number holds up if the lender counters.
If a short sale fits, I'll write the offer so the approval deadline and your earnest money are protected, and I'll keep after the listing agent until there's an answer. The seller's whole side of the process is in my Tennessee short sale guide.
Frequently asked questions
Is it a good idea to buy a short sale home?
It can be, if your timing is flexible and you can buy as-is. The seller's lender has to approve the price and terms, so the wait can run weeks or months. It's a harder fit if you have to close by a fixed date.
How long does it take to buy a short sale?
It depends on the seller's lender. On a Fannie Mae loan, the servicer has to give a written answer within 30 calendar days of a complete package and the offer. On two recent Columbia short sales I listed, one closed 90 days after the accepted offer, and in the other approval came 16 days after the final contract went in.
Can I get an inspection on a short sale?
Yes. You can inspect during the inspection period your contract sets, and some buyers write it to start once the lender approves. Expect to buy as-is: on an FHA short sale, repair reimbursements or allowances can't come out of the sale.
Can the seller pay my closing costs on a short sale?
Only what the seller's lender allows. In both of my recent Columbia short sales, the servicer held help toward the buyer's closing costs to 3 percent of the price. Ask before you write it into your offer.
What happens to my earnest money if the lender says no?
That depends on your contract. Write the lender's approval in as a condition with a deadline, and spell out that your earnest money comes back to you if approval doesn't arrive by then. Have a Tennessee real estate attorney check the wording if you're unsure.
What is the HUD Pre-Foreclosure Sale Addendum?
It's the addendum HUD requires on an FHA short sale. The buyers, the buyer's agent, the sellers, the listing agent, the closing agent and any facilitator all sign it, and the sale has to be arm's length, with no hidden terms or side agreements.
Can I resell a short sale home right away?
On a Fannie Mae short sale, no. The deed bars resale for 30 days after closing, and for more than 120 percent of the short sale price until 90 days after closing. Other lenders have their own rules.
If there's a short sale you're looking at in Williamson or Maury County, send me the address and I'll tell you what the lender side looks like before you write an offer. DM, text, or call me at 615-392-1186.
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