8 Things to Know Before Buying a Short Sale or Foreclosure in North Texas
Is it a good idea to buy a foreclosure or short sale in North Texas? It can be, if you understand the process. With bank-owned homes, the bank makes the decisions on its own schedule. Short sales need lender approval and can take months.
From 2021 through 2023, distressed sales were rare in Sachse, Wylie, Murphy and Lavon. That's changing. More bank-owned (REO) homes and short sales are showing up in the MLS and buyers are asking whether they're worth pursuing.
They can be. But buying a distressed property works differently from a normal resale and the buyers who do well are the ones who know the rules going in.
Jeanie Marten Real Estate is a brokerage, not a law firm. Nothing in this post is legal advice, and TREC rules prohibit brokers and agents from giving it.
1. What's actually happening in our market
Distressed listings in Sachse, Wylie, Murphy and Lavon have climbed every year since 2023. From 2021 through 2023, the four cities saw just 3 to 5 a year. In 2026, 22 have hit the market through September 28, already more than all of 2025.
Year | Sachse | Wylie | Murphy | Lavon | Total | Short sales | Bank-owned or in foreclosure |
|---|---|---|---|---|---|---|---|
2021 | 2 | 0 | 1 | 0 | 3 | 1 | 2 |
2022 | 2 | 0 | 3 | 0 | 5 | 0 | 5 |
2023 | 1 | 2 | 1 | 0 | 4 | 0 | 4 |
2024 | 1 | 3 | 0 | 5 | 9 | 5 | 4 |
2025 | 3 | 10 | 0 | 3 | 16 | 7 | 9 |
2026 (Jan 1 to Sep 28) | 3 | 9 | 1 | 9 | 22 | 9 | 13 |
Source: NTREIS MLS, residential properties listed with a Special Listing Condition of Real Estate (Bank) Owned, In Foreclosure or Short Sale, counted by the year listed, in any status. Each property is counted once per year, even if it was listed more than once. Pulled September 28, 2026.
Three things stand out:
- The pace is accelerating. At its current rate, 2026 is on track for nearly 30, roughly six times the 2022 level.
- Short sales are back. There were none in 2022 or 2023. There have been 9 so far in 2026.
- Wylie and Lavon account for most of it. Together they make up 18 of the 22 in 2026. Several of the Lavon homes were built in the last five years.
The numbers are still small compared with the total number of homes sold in these cities. Distressed sales are a growing slice of the market, not a wave.
2. Know which kind of distressed sale you're looking at
- Short sale: The owner is selling for less than they owe and the lender has to approve the price.
- Foreclosure auction: In Texas, foreclosure sales happen at the county courthouse on the first Tuesday of the month between 10 a.m. and 4 p.m., after at least 21 days' notice. Auctions are usually cash, with no inspection and no option period. This is not where most homebuyers should start.
- REO (bank-owned): The home didn't sell at auction or is a type of loan that requires it be offered to buyers planning to occupy and now belongs to the lender. This is where most buyers find foreclosure opportunities.
3. With a foreclosure, the bank makes every decision
There's no homeowner to negotiate with. An asset manager at the bank reviews your offer and banks work business hours. Offers written Friday night may not be seen until Monday. Build patience into your timeline.
4. Keep the contract clean
Banks respond best to simple offers. Expect their own addendum, which usually overrides parts of the standard contract and read it carefully. Don't load your offer with special requests.
5. Don't ask for specific repairs. Ask for an allowance.
Banks sell as-is and generally won't make repairs. If the inspection turns up something serious, ask for a price reduction or allowance and only for items you couldn't have known about before the inspection. Asking for money to fix what was obvious at the showing rarely works.
6. Inspect anyway
As-is doesn't mean skip the inspection. It means you need it more. Vacant homes can hide plumbing leaks, pest problems and HVAC failures. Ask whether the utilities can be turned on for the inspection. For help judging what you find, read Signs a Fixer-Upper Is a Smart Buy Versus a Money Pit.
7. Short sales can take forever
Short sales are the most complicated distressed purchase. The seller's lender has to approve the price and that can take weeks or months, sometimes with more than one lender involved. Texas has a Short Sale Addendum, TREC No. 45-2, that addresses lender approval timelines and buyer termination rights. If you need to move by a specific date, a short sale may not be the right fit.
8. Keep your financing ready and flexible
Have a strong pre-approval and talk with your lender about how long your rate lock can last. Delays are common with both REOs and short sales, so ask what an extension would cost before you need one.
The takeaway
Distressed sales can be a real opportunity for buyers in Sachse, Wylie, Murphy and Lavon. They reward patience, clean offers and a buyer who inspects carefully and asks for money only where it's justified. They punish buyers who expect a normal resale.
FAQ
When are foreclosure auctions held in Texas? On the first Tuesday of each month, between 10 a.m. and 4 p.m., at the county courthouse, after at least 21 days' notice.
Will a bank make repairs on a foreclosed home? Usually not. REO homes are generally sold as-is. You can ask for a price reduction or allowance for issues you couldn't have known about before the inspection.
How long does a short sale take in Texas? It varies widely, because the seller's lender has to approve the sale. Weeks to several months is common.
If you found this useful, read these next
- The Option Period Is Where North Texas Deals Are Dying. Here's What's Actually Happening.: how negotiations after the inspection really play out right now.
- When the Appraisal Comes in Low: What Buyers and Sellers in North Texas Should Do Next: what to do if a distressed property appraises below your contract price.
Watching for distressed listings?
Jeanie Marten Real Estate tracks bank-owned homes and short sales across Sachse, Wylie, Murphy and Lavon. Call or text 972-414-0719 or email [email protected], and we'll set up a search and walk you through the process before you make an offer.
Sources: Texas Property Code Section 51.002 · TREC Short Sale Addendum
