However, short sales can be challenging. They often draw multiple buyers, who compete for the winning bid. And it can take a while for all the paperwork to wind its way through the approval process.

A short sale occurs when a house is sold by someone whose outstanding mortgage balance is more than the house is worth. The owner works with his bank, which must agree to accept less than it is owed on the house. As a result, short sales often take longer than a traditional sale.

Here are some tips to successfully purchase a short sale:

• Work with a knowledgeable real estate agent who has experience with short sales. Your agent will be able to keep you up to date on new listings as well as help walk you through a process that can be lengthy and frustrating at time.
• Stay up on the market so you know when new short sales become available.
• Act quickly! When you spot a house you like, try to be the first to submit an offer.
• Be patient. These transactions often take 30 to 60 days—or more—due to all the documentary requirements.
• Submit a reasonable offer. Remember that the lender is looking to reduce its losses as much as possible and with competitive bidding likely for the house, your offers need to be in the ballpark.
• Try to include as few contingencies in your offer as possible. You won’t want to waive your right to inspect the property, but if you are pre-approved for a mortgage, then the lender may consider your offer to be more solid than other buyers’.

Wondering whether you should buy or rent? Well, according to a www.forbes.com study released on Oct. 26, the decision depends on where you live.

In some cities, the cost of renting is significantly less than owning, so renters can afford to live in homes they couldn’t possibly purchase. Renters also benefit in areas where housing prices are still dropping.

It’s better to own, however, in places where the cost of renting is higher than the after-tax cost of owning.

Forbes.com compared buy-vs.-rent data from two well-known housing-data firms, Trulia.com and Zillow.com, with its own buy-vs.-rent data for high-end neighborhoods in 10 of the largest cities in the United States. It then came up with the six cities that are best for renters and six that are best for homeowners.

San Francisco was deemed the best city in which to rent, followed by New York. The cost of purchasing a home in San Francisco is 20 to 30 times annual rent, so renting makes more sense for many people. In New York, the cost is 17 to 35 times. Other cities in which it makes sense to rent are Los Angeles, San Diego, Boston and Washington, D.C.

The best city in which to buy a home, according to Forbes.com, is Miami, where the price-to-rent ratio is 8 to 17 times annual rent. Other cities in which it makes sense to buy are Jacksonville, Phoenix, Atlanta, Nashville and Houston.