For folks who think we got a great deal on our investment property, they have to balance that with the hassles we were put through. All in life is fair; there is a reason why these houses are sold cheap.

A short sale is like a tripartite dance between the buyer, the short seller, and the bank that holds the title, and that’s not counting the buyer’s mortgage lender. Any one of these can trip up the others, and the deal will fall through.

Here is the list of 10 troubles we went through:

1. The seller was willing to sell at $170,000, and he said the bank had pre-approved the price. Once we accepted the price, the bank (Bank of America) reneged. It would not release the title unless the price was $180,000. After a few weeks of negotiation, we split the difference – $175,000.

2. We went ahead and applied for the mortgage. Even though we have stellar FICO scores – my wife’s score is well above 800 and mine is only a smidgen below – the mortgage lender made us submit new paperwork every day for three weeks just to prove ourselves. We almost gave up there!

3. Now that everything seemed to be in order, it was discovered by the seller’s agent that the seller owned a second mortgage that he did not disclose. Now we were back to square one; the second mortgage lender wouldn’t wipe the slate clean unless it got something as well. After a few weeks of renegotiation, we agreed to raise the price back to $180,000.

4. Now the settlement date was set and we were all set to go. The seller then discovered the Home Affordable Foreclosure Alternatives (HAFA) program, a federal government program that is purported to help short sellers. The short seller can get $3,000 if he goes through the program. The settlement company did not handle HAFA, so we were back to square one.

5. Now that we were in the HAFA process, Bank of America reneged again. It wouldn’t release the title unless the price was $190,000. A few more weeks of haggling and we split the difference again – $185,000.

6. Bank ofAmericahad to send us the approval letter so that we could apply for the mortgage all over again since the old mortgage approval was six months old, and everything had to start afresh.

7. The approval letter Bank of America sent us listed the price as $188,000, but we had agreed to $185,000. Many phone calls back and forth, and they acknowledged their mistake and promised to send the correct approval letter in a minute.

8. The minutes stretched into hours, then days, then weeks. One month later, we had had enough. We fired an angry letter to Bank of America saying we were dropping the deal. Miraculously, the approval letter appeared with the correct amount.

9. Three days before settlement, we had our final walkthrough. The seller was supposed to have moved out by then, but he was not moving. There were not even moving boxes on the property. We frantically called the seller’s agent who promised he would personally carry the seller and his family away. We arranged another walkthrough one day before settlement. My wife swore she would drop the deal if there is anything trash left in the house.

10. My wife tossed and turned for two nights worrying that the seller would not move after all. Then came the final walkthrough. Voila, the house was empty!

The rest was a piece of cake. Are you still interested in buying a short sale house for below market price?

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