Buyers Beware! Short Sales May Run Short Of Expectation

"I looked at other homes and I liked this one best," says Doris Globe. She thought she found her perfect first home when she put in a contract for a property on Coppersmith Square in Reston. 7 months later, she's still waiting to find out if her offer's been accepted. "I bought a short sale and Bank of America is giving us the run-around," she says.

The property is now worth 90,000 less than the homeowners originally paid for it. In order to avoid foreclosure, the seller has entered an agreement with his lender, Bank of America to put the home up for sale and in return, the bank is willing to forgive a portion of the original mortgage.

But buyer beware. If you buy a short sale property, the bank has the ultimate say over the entire transaction. They determine if and when the deal with go through.

"We keep on calling them and nobody answers," says real estate agent Martha Tabares, who represents the seller. She's documented how many times she's tried to get answers from the bank about what's keeping this transaction from moving forward. "We have gone through so many negotiators, levels of management and nobody knows anything," she says.

"Lenders are not enthusiastic about giving up what's owed to them," says real estate attorney Robert Fredericks. He says short sale buyers sometimes end up assuming more risk than they anticipated. He says, "in a short sale, the seller's getting no proceeds so if there are problems with air-conditioning, problems with systems in the home that are discovered at the last minute, the buyer may not have the remedies that are customarily available to him."

Globe's advice? "Don't get into short-sales, it's just not worth it," she says. She now wonders if she should start looking for another home.