Occasionally, the phone will ring, and I'll pick up to hear dreaded words on the other end of the line.  It was no different yesterday morning.

The voice belonged to a seller I had as a client a few years back.  His home had sold, and he had successfully made his corporate move.  However, he is currently hoping to retire and move back to Sacramento.

The dreaded words tumbled from his lips, "Myrl, I really want to get a good deal, and I think that will be a "short-sale."  The first questions back to Bob (not his real name - which is changed it to protect the guilty and even the innocent), "Bob, have you become anymore patient and handy than you were when I saw you last?"

"Well no - not really," was his reply!   

After working as a Greater Sacramento Area Realtor for the past 28 years, I had wondered what it was about the current market, which had me, less than exuberant about working with eager buyers waiting to swoop up those apparent bargain priced distressed short-sale properties that have flooded the market these days.

Then I realized what it was.  For all the hype promoting short-sales or bank repos, I realized much of the process ran counter to what I had been working toward in assisting - and especially protecting home buyers these past decades.

To provide an example - At the beginning of my career in 1981, real estate professionals often used a one-page contract to draw up an offer.  There were generally NO disclosures. 

However, over the years, the evolutionary trend became increasingly and rightfully, a slow steady effort to enlighten, inform, and especially protect the home buying consumer from financial harm when it came to making one of their largest monetary investments, if not the largest.

We began to see disclosures from the seller about known defects of the home.  There were other standard disclosures about lead-based paint, flood plains, earthquake hazards, and other disclosures, in addition to suggested inspections, etc.   The ole one page contract soon went to four pages, later to 10 pages, and now beyond that.   Much of this activity dealt with informing and disclosing to the client.

Although in 1981 termite inspections and an occasional roof inspection occurred, we really hadn't seen any home Inspections and the multitude of other available inspections now available.  But, these too became mainly part of the norm as years passed by.

From the beginning, I thought the more disclosures during a home sale, the better - Knowledge is power.

Fast forward to today's world of real estate sales, where in the Greater Sacramento area, the vast majority of home sales are either "short-sales" - or bank owned properties with little or no disclosures.

Add to this, that the "short-sale" homes, especially in the entry-level price range, often receive multiple offers creating a competitive feeding frenzy among homebuyers.  This frenzy can create conditions that have buyers making snap decisions counter to their best interests.

It is not uncommon for the short-sale listing agent to send over a counter offer or addendum, stating that your deposit is non-refundable for periods of 60 to 120 days.  It is important to understand that the sales agreement is between the Buyer and the Seller.  BUT, there is a very important third party involved in a short sale, and that party - the existing lender(s) holds the lion's share of power in a short-sale transaction.  The bank is provided the offer(s) only after the buyer and seller have reached a certain level of agreement; but EVERYTHING is subject to Bank Approval.  Banks are often notorious for not making decisions on a "short-sale" quickly - and they can be fickle.  

It is quite possible your non-refundable deposit is nothing more than a lottery ticket on purchasing a "maybe" rather than a house. 

Couple that with the fact some short-sale seller agents require the buyer agent to agree in writing that they will not show the buyer any other homes that are currently on the market, or come to the market.  If the bank ultimately bails, you could have spent weeks, and months while losing out on other homes being marketed.

Here's another wrinkle that can put buyer dollars at risk.  While you "think" you may have purchased a house which may turn out to only be a "maybe" sale, you could be advancing dollars for a number of inspections to make certain your potential investment is sound.  Because the clock is generally ticking on time-frames contractually set to perform and approve inspections and their findings, buyers are often required to make decisions regarding these inspections swiftly with not much time for thought. 

These are dollars that can easily be lost should the Bank shakeout and scuttle your transaction.  There have been cases where agreed upon "short-sales" have ended up at the auction block in the middle of what was thought to be a secure short-sale escrow.  An alert agent can retrieve some of these transactions; but some transactions are not saved!

There have been a few really wonderful home sales that I have assisted buyers with in the last few years.  The best experiences come after I have been wandering through vacant homes requiring much needed repair, with a buyer possessing little skills in rehabbing homes.  It is a joy to then take them into a new home development, where everything is new, includes a new home warranty, and usually cash incentives that can be used for upgrades for carpets and other amenities in the home.

There are a few great builders in the Greater Sacramento area, who cooperate with me fully, and are a joy to work with.  I appreciate what is told to the buyer during the home buying experience with the builder turns out to be concrete, straightforward and true.   And the games often played during a "short-sale" are not present.

However, if you are one of those souls who feel life begins with "short-sales" I know a great "short sale" specialist in the Sacramento region, who makes blood sport out of that type of real estate transaction.  I will be happy to refer you to that agent.

So the next question to Bob was, "Do you want to shoot craps, or do you really want to buy a house?"