Dont feel bad...the same thing is going on in CA

Kristi - Wow.  I just read through Frank's post.  He's got some very solid numbers to back up his theories.   And what he says jives with what I've seen - foreclosures are not necessarily rock bottom deals, and short sales are very tough to buy.

Kristi, Frank's post is an excellent (although depressing) analysis.  I thought banks were greedy and stupid.  Now I just think they're greedy.

John - Sorry to hear that others are experiencing the same problem.  Until NAR steps up and gets a handle on this and sets some appropriate guidelines...these short sales will continue to be a free for all.   False Prices & Fake Inventory....this is destroying our market and the credibility of our MLS here....sad. It is creating a domino effect and spreading over to the neighboring properties trying to compete against unrealistic list prices.  Many of us here locally are adopting a "Just say NO to Short Sales" motto.

Penny - I was thrilled when I came across Frank's Blog post on this issue...it was like he was speaking my same thoughts.  Short sales are being used in my area as bait and switch advertising by unethical agents.

Very interesting Kristi. We haven't gotten enough of them here in our market to experience the same sort of things your are...........yet.

Brian - If it makes you feel any better you were not wrong...they are stupid too :-)

Kristi.... Looking forward to your reporting on this subject.. I believe it is going on all over

Patrick - Where are you?  Glad to hear that you are not seeing this problem.  Once it starts it spreads like a fungus.  Sellers in most cases have no idea what they are getting into.  Agents are telling them that they are able to save them from foreclosure and continue to give these poor people false hope.

 Here is something scary for you...up to 44% of our MLS listings are Short Sales.  I think probably less than 10% of those are actually properties that will even qualify for a short sale situation.  What most do not understand is that not only must the house qualify at the price, but the owner must be destitute.  They must not have any assets or money in the bank.  The banks are not just releasing people from mortgages because they are asking for it...the owners must be broke.  And, just because the owner is released from the mortgage does not guarentee that they are released from the note.  Most agents I have met do not even know the difference between a mortgage and a note...ugh!!!!

If you do ever get in a situation that you take one of these types of listings...make sure you are not assisting someone that has other assets or income to pay the note...you could be assisting with mortgage fraud if the owners are lying to the bank to get out of the note and mortgage. Not just risking losing your license but also risk losing your freedom and going to jail.  food for thought.

I advise any agent considering taking on a short sale listing consult with thier attorney to find out the liabilities before they sign the bottom line.

Roland - Thanks.  I have been fired up about this issue for months now.  I have become very educated on short sales very quickly because we are in an area that is being detroyed by them.  I look forward to sharing my opinions.  I am sure some of my comments will be considered controversial.  My biggest peeve is that these properties are being advertised on websites like REALTOR.com without any type of disclosure that these are short sales and not real prices.  Creates great marketing for the agents that get calls on them...bait and switch in many cases.