"Short Sales" are not well understood by buyers!

There are hundreds of "short sale" lisings in the Fresno MLS today. I have found that most buyers I consult with in the Fresno real estate market today do not understand or know what a "short sale" is. A short sale is a situation whereas the existing loans are larger than the asking price, and the owner of the property is behind in payments. If you were to make an offer on the property, the exisiting lender would be making the final decision on the offer, because the lender would be taking the "short" payoff. From what I see, many lenders are taking their time making these decisions and it is frustrating and misleading to the buyers. The buyers get an offer accepted by the owner, only to find out weeks later that the lender is not approving that sale price!! I see many listings where the listing price of a home is $100,000 less than the balance of the existing loans!! Do you think the lender is going to be cooperative and quick to lose $100,000?? I think not! Many times the lender will not appprove of the short payoff, so foreclosure is the remedy. Typically, the existing owner must be able to prove to the lender they are having a financial hardship to get approval for a short payoff. As an agent, I have to make sales. I avoid showing short sale listings most of the time and discourage most buyers from getting involved. Sometimes it will take weeks for the lender to answer an offer, or the owners hardship is not approved, or the lender just forecloses rather than take a short payoff. Also many owners will find out that if the lender approves of a short payoff, that the amount of debt releived is considered income by the IRS, so there can be an income tax consequence for the existing homeowner who sells under a short payoff sale.