I despise this guy. With every fiber of my being, I despise this guy. And since I love people, and I’m actually very professional, you have to know I must really dislike this guy to say that! But because I’m a nice girl, I’m going to change the names to protect the stupid.

I’ve invested countless hours over the past two months to try to help my client, Sandy H., buy a house in a “short sale.” (FYI, I also despise short sales. But I have a good track record, so clients ask me to help them and I haven’t learned to say “Oh, hell no!” yet.) At best, short sales are difficult, low-paying, hair-pulling, pain-in-the-butt deals. When you have a buyer or seller either interfering, being deceptive, or trying to control a process they don’t understand, short sales can keep you awake at night and make you regret not going to beauty college. And this seller whom I despise, Will, has committed two out of three of these offenses, if not all three.

By way of brief explanation, a short sale is completed when a lender agrees to accept less than is owed on a property in order to allow a seller to sell a home with insufficient equity to cover the loan and costs of the sale. Generally, the bank takes a loss of tens of thousands of dollars. The seller, who’s likely to otherwise lose his or her home, walks away with no money, and may owe income taxes on what the IRS views as “forgiven” debt. The biggest winner is usually the buyer, if she hasn’t thrown up her hands in despair and walked away by the time the deal is finally approved by the lender.

Murphy was obviously a short sales expert when he crafted his law.

So why do I despise Will? Well, first of all, I just said that to blow off steam. Must be my involvement in non-profits, but I love people and will go out of my way to help even a stranger. Will has interfered so many times that the loss mitigation officer, sitting at a desk heaped with short sales requests, is ready to turn this one down just to get this guy off his back. My client, Sandy, will get this house for $400,000 under market value if this is approved--but equally important, the seller won't have a foreclosure on his record.

Will has run two buyers off with his arrogant and duplicitous behavior. He has no clue what he’s talking about (which, come to think of it, is very scary, considering he tells me he’s a licensed mortgage agent), yet insists on trying to negotiate a complex deal with no experience. He will not take advice, and he may shoot himself in the foot and lose his home. What’s that saying—the man who represents himself has a fool for a client?

Just a few short years ago, there were very few requests for short sales in Las Vegas —or pretty much anywhere else, for that matter. People made their mortgage payments, and it was all good. Unless you’ve been lost at sea for the past year, you know that, for various reasons, many homebuyers have found themselves in deep financial trouble or unable to make the higher payments when their ARM adjusted. The resulting rise in defaults has escalated the number of short sale requests from sellers who find that they can’t sell their homes for enough to cover the mortgage and closing costs; see here.

It’s all I can do not to scream when I see real estate agents with no short sales experience drag buyers or sellers through this process. Often, an agent will list a home at a price they hope the bank will accept, without even checking with the bank’s loss mitigation officer first! “The bank has to approve it—otherwise the sellers will lose their home,” the agent insists. Yes, and the banker also doubles as the tooth fairy when he’s not wearing his Santa suit and giving houses away. I hope this agent enrolled in beauty college after the bank foreclosed on her poor client’s home.

If you’re looking at a home being offered as a short sale, don’t waste valuable time chasing this house, only to find the price was someone’s wishful thinking. Affirm with the seller or his agent that the price has been approved by the bank before writing an offer. Or better yet, have your experienced Realtor affirm that, and help you avoid other pitfalls as well. Why not consider one of the thousands of foreclosed properties on the market? After all, many are nearly new, are in great condition, and banks are anxious to get these off their books.

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