I have something shocking to tell you. Bankers are not as smart as you or I think they are. You know the "perfect banker" that we meet in public. The person has never missed a payment, never been late, and has always had a bunch of savings in the bank. They sneeringly look down on normal Americans that haven't saved their money like Scrooge Chuck.

Here is the sad truth. Although they think they're so smart with money, they actually are not. And today I'll show you one example. Let's look at how 90 percent of the banks handle the short sale process. When an offer comes in on a short sale, it takes 30-60 days for a person at the bank to look at the offer.

Then, that person orders an appraisal on the property. After that appraisal comes back, the bank employee reviews the property value and the home seller's personal financial situation. Based on that, they approve or deny the short sale offer. They do this to avoid approving short sales when either a homeowner can still afford the house or the house is selling to low. Seems like a smart way to do things, right?

Here comes the stupid part. What do they do if the short sale offer is rejected? Well, they tell the buyer to hit the road and close the file. Everything gets thrown out. The appraisal is thrown out. And all the time that employee spent looking at the seller's finances is thrown out, which means that they have to do all of that work again when a new short sale offer comes in. What's worse is that it causes the banks to lose millions of dollars.

As an example, an agent I know told me about a short sale property he handled. "The first offer for $275,000 was rejected by the bank. Several more offers were rejected over the next year. The housing market continued to decline. Finally almost 2 years later they accepted an offer for $235,000. Yes, they lost $40,000 because of the flawed short sale process. That's a pretty dumb way to handle things, isn't it? And yet, most bankers sneeringly think they are responsible with money! It's crazy, isn't it?

As you can see, the key to a successful short sale and avoiding the mark of a foreclosure on your credit. 

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