Short sales stink. They’re tough on the lenders, the buyers, the sellers and the Realtors. And it could get worse – or better. It depends.

In the 1970s, there was a tear-jerking baseball movie titled Bang the Drum Slowly that starred Robert De Niro in one of his first roles on the big screen. It was baseball’s answer to football’s Brian’s Song with the only slight difference being that Brian Piccolo and Gale Sayers were real people and Robert De Niro’s character was not.

In the movie, the veteran players hazed the rookies by luring them into card games called “TEGWAR,” an acronym known only among the vets for “The Exciting Game Without Any Rules.” Short sales are the modern day TEGWAR.

If there is an expert at TEGWAR, or short sales, it is Carrie Zeier with ReMAx Elite. Zeier is the owner of several ReMAx Elite franchises and is one of the more successful entrepreneurs in the real estate industry. She once owned a short sale company that managed more than 100 short sales simultaneously. There are those who point to the performance of that company in terms usually reserved for Bill Gates and Microsoft or Steve Jobs at Apple.

In her case, the main difference is she closed her short sale company, moved into management and development of real estate companies.

In an interview this week, Zeier said she got into the business to help people who were struggling, and she did. Admittedly, although her short sales company is closed, she continues to handle short sales on a case-by-case basis.

On the positive side, she notes several of the sellers who participated in short sales two to three years ago were able to restart their lives and are once again buying houses.

The reason the process is complicated is lenders are unresponsive, unreasonable and often make proposals with contradictory language, dates and deadlines. The term “short sale” is a misnomer since they can take years. Such a situation is understandable since there may be as many as 1 million properties that are candidates for short sales nationwide, most of which have Countrywide as the lender.

Bank of America is instituting a policy that short sale offers must receive a response within 30 days, and if that deadline is missed, then they must communicate weekly for the next 30 days.

This is an enormous improvement over the current situation. Reflect on the irony of that statement. Submitting an offer on a property and having a response to that offer in 30 days is an improvement. Since there is a contingency plan for missing the “deadline,” count on the deadline being missed.

Zeier’s most helpful observations are that there is a misconception that short sales do not affect the seller’s credit. As previously mentioned, it can take three years to rebuild the credit rating. Also, some misunderstand the post-short sale repercussions. Unless the seller receives a 1099 from the lender, the person is not forgiven the debt of the shortfall.

Therefore, if a short sale is granted, and the net proceeds to the lender are $50,000 less than the loan, the seller could be liable for that debt unless given a 1099 form stating that amount as forgiven.

A 1099 form states the person received the $50,000 as income. Zeier is quick to cite that there are laws in place to protect the seller from tax consequences of “income” received from a short sale, but those laws expire on Dec. 31, 2012.

If they are not extended, short sellers will be required to pay capital gains on short sales, and a citizen cannot include federal tax liability in a bankruptcy. What a mess.

Sales of the Week

Belle Meade Court condominiums are located behind Harris Teeter on Harding Road. In Nashvillespeak, they are behind the building that used to be Bookstar, or for us old-timers, the Belle Meade Theatre.

Belle Meade Court was born during the Great Recession of 2008 with its first closings in 2009. In that beleaguered year for all of real estate, the development mustered a mere six sales, and glad to have had those, as the price range of $438,500 to $665,000 kept them out of the reach of those first-time homebuyers who were reaping federal tax benefits.

The following year, 2010, there was some recovery and 10 homes were sold between $315,000 and $516,000. And, in 2011, sales increase to 15 units with a 1201-square-foot unit selling for $299,900, and the highest sale at $565,000. Word on the street was that these sales included some hefty buyer incentives such as closet allowances, window treatments, appliances and closing costs.

Until this time, there was basically no financing available as the ratio of owners to occupants was not at a level to please Fannie Mae, Freddie Mac or any other hillbilly-sounding, double-named government sponsored lending programs.

After finally reaching the Fannie Mae threshold, coupled with and due in fact to a recovering real estate market, the project is experiencing unprecedented sales with 16 sold, six sales pending and closing soon, and another three units under contract in the first five months of 2012. These 25 sales that will go down in the first half of 2012 obviously eclipse the 21 sales in the development’s first two years.

MacKenzie Strawn of the Atlanta office of The Marketing Directors LLC, is the onsite agent and has been a resident in the Belle Meade Court since September. She began selling there early this year. At this writing, she is negotiating three additional contracts.

Interestingly, 11 buyer’s agents have brought buyers into the fray. Normally, the onsite representative has a majority of sales.

Richard Courtney is a real estate broker with French, Christianson, Patterson, and Associates and can be reached at [email protected].