This helps the investors because they don’t have to endure the costly expenses of forcing a foreclosure. Deals that were NOT coming together in past years are moving rapidly through the banking system now.

There are still some communication issues, but they are minor compared to past years.

Unfortunately, I can still see too many questionable tactics being employed to buy real estate. The latest one that is becoming a problem in my area are buyers being coached to get accepted offers on multiple short sales. The theory being that if you have enough in contract, something will approved by a bank and you can bail out on the other sellers and take the first that goes through.

This is wrong on so many levels, but some agents and buyers don’t seem to care. Why should they worry about a seller getting dumped out of escrow and having their bank foreclose the home? Or all the hard working agents, brokers, lenders and escrow people who thought they had a deal, only to find out they were being lied to and they won’t be getting paid? It certainly doesn’t matter to them that they’ve lowered inventory for other buyers that might actually go through with the purchase.

Bottom line, protect yourself when dealing with Craig’s List. Insist on meeting the landlords or management companies at the property. If they are real, they will have access to the home. If they give you excuses, you need to be wary. Be especially careful with anyone who says they are “out of the country”. People don’t rent homes that way. They will at least hire a local management company to watch over their home.

It’s bad enough to try to sell when they are underwater on their mortgage, but to add insult to injury, they are now being squeezed by the junior lien holders in the short sale process.

It works something like this. Seller puts home on market and does a “short sale”. First lien holder bank agrees to market price, and makes a deal with the second lien holder bank to sign off on the deal in exchange for a small payoff (junior lien holder would make NOTHING if the first forecloses on property). After months and months of the short sale process, the final week comes to close escrow.

Surprise! The junior lien holder has sold his note to another investor. And guess what? The new investors wants more money then the previous deal. So now you’ve got three parties, the buyer, the seller and the first lender who are all counting on this transaction to close and you’ve got a deal in chaos.

It may be legal, but it’s certainly a shady way to make a buck. Sadly, I expect to see more and more short sale transactions held hostage by junior lien holders hoping to make a fast buck.