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Faced with a booming housing market, rising home prices, and stiff competition from other buyers, you may wonder if buying a short sale home is a good way to pay less for a house.

In March 2021, one out of every 11,396 homes were in some stage of foreclosure, according to RealtyTrac. A third of those homes are in pre-foreclosure, which means some homeowners might be looking to avoid foreclosure through a short sale.

While a short sale may be a route to a good deal on a home price, there are also challenges to be aware of before you consider buying a home on short sale. Here are some things to know about short sales.