Wholesaling Short Sale Properties in New York

The short answer

Can you wholesale a short sale in New York?

Generally yes. You can sign a purchase contract with a seller whose lender must approve a payoff below the loan balance, then assign it, but the lender decides, and New York protects owners in default. Expect delays and ask an attorney to review the contract before you commit.

A short sale closes only when the lender accepts less than the full loan balance. The owner submits a hardship package, the lender reviews value and offers, and an approval letter names the amount. Our short sale wholesaling guide walks through the steps. Many lenders also ask for an arm’s-length affidavit, so read our arm’s-length guide.

In New York, courts add a path. In a home foreclosure, CPLR 3408 sets a settlement conference within 60 days after proof of service is filed, and short sales can come out of it. Before a lawsuit even starts, RPAPL 1304 generally requires a 90-day notice. Check current text, and keep your dealings with a distressed owner clean.

The opportunity

Why short sales turn up around Buffalo

Buffalo’s older housing stock and uneven values leave some owners owing more than a house is worth. On the East Side, in Kaisertown and in parts of Riverside, a two-family bought near its peak may carry a loan above today’s price. Add a job loss and the owner needs a way out. Erie County foreclosures can run long, which gives people time to seek a lender-approved sale. Investors who buy in Buffalo often want rentals, so they pay close attention to price and repairs. Use our repair cost guide to set an honest offer.

Lead sources

Where to find short sale leads in Buffalo

• Pre-foreclosure filings. Look for owners who received notices. Our notice of default guide explains the paper.
• Housing counselors. Nonprofit counselors and legal aid offices meet owners who need options.
• Direct mail. Short, honest letters work best. See direct mail for wholesalers.
• Attorneys. Foreclosure defense lawyers know which cases may end in a short sale.
• Expired listings. Some owners list at a price the lender will not accept. Try our expired listings guide.

Your exit

Who buys short sale houses in New York

Rehab investors and small landlords buy most Buffalo short sales. They accept a long timeline in exchange for a price discount. Some prefer to hold the property as a rental after repairs.

Be honest about timing. Lender decisions can take months, and a buyer who needs a quick close may walk. Our REO guide covers what happens if the sale fails and the bank takes the house.

Step by step

How to start wholesaling short sale properties in New York

1. Qualify the owner. Ask about hardship, loan balance and any court dates.
2. Estimate value. Use the ARV calculator and comps before you offer.
3. Set your ceiling. Run the MAO calculator and leave room for repairs and your fee.
4. Hire an attorney. Use a New York attorney to review the contract and the lender package.
5. Sign and submit. Sign a contract with a lender-approval contingency, then send the hardship package.
6. Track the lender. Follow up with the negotiator every week and keep a log.
7. Assign and close. Assign the contract once approved, with attorneys on both sides. See assignment of contract.

A Riverside owner owed $164,000 on a two-family worth about $138,000. After a layoff, payments stopped. She received a pre-foreclosure notice and attended a settlement conference where a short sale was discussed.

You signed a contract at $112,000 with a lender-approval contingency and a 30-day inspection window. Repairs were near $26,000. Four months later the servicer approved the number after one revision and a new appraisal.

A local landlord paid you an $8,500 assignment fee and closed with attorneys. The owner left the house without a deficiency demand from her lender, which was written into the approval letter.

New York rules to know

Conferences, notices and distress rules

CPLR 3408 requires a settlement conference in many residential foreclosures, within 60 days after proof of service is filed, where both sides must negotiate in good faith toward options like a short sale. RPAPL 1304 generally requires a 90-day notice before a home loan case starts, and failure can defeat a case. Check current text on both.

RPL 265-a covers equity purchasers of one-to-four family homes in foreclosure or default, with a cancellation window through the 14th business day, a two-year voidability period and Attorney General penalties up to $25,000 per violation. A deficiency judgment may be allowed in New York, so get the lender’s release in writing. See our deficiency judgment guide.

Learn it with a mentor

Navigate the lender process

Short sales reward patience and clean files. Mentorship students show us their packages, and we help them avoid mistakes that delay approval.

FAQ

Short Sale Properties in New York: common questions

Keep going

More New York wholesaling guides

Read the full New York wholesaling guide or pick another situation below.

Guides that go deeper