My story started out simple enough. I needed a place to live after separating from my wife in September 2005. My brother offered to buy a condominium for me. His offer came with the provision that I would not have to pay rent or payments. In a year’s time I would pay him the full cost of his purchase and payments. My brother paid $275,000. Twelve months later, I was accepted for what I learned later was a sub-prime mortgage. I repaid my brother. This all seemed like a good idea. What could change?

The first change occurred in early 2007. My small local bank sold my mortgage loan to a large national bank. This was during the time when Fannie Mae and Freddie Mac were taken over by the treasury department.

The second change came in June of 2007. Newly retired, I decided to move to South Florida.

The third change was evolving. Concurrent with my brother’s initial acquisition, my purchase from him, and my decision to move, the country was at the beginning of the housing market crash. Other units in my complex were sold, rented, or vacated. I was dismayed to learn that units were selling for less than what I had paid.

My brother’s generosity was turning into a situation that could decimate my savings and retirement income. I read numerous stories about foreclosures and people abandoning their properties and filing bankruptcy. My situation was more and more confusing to me.

I met with my real estate agent in August 2008. We had known each other through four successful real estate transactions. By September, she convinced me to put the property on the market for $65,000 less than what I had paid in 2006.

My real estate agent enlisted potential buyers. The market was stagnant. My agent, usually a top salesperson, had not had a sale in two months. Sellers weren’t selling because the values had gone down. Buyers were waiting for prices to go down even further.

By January of 2009, there were no offers. We lowered the price to $197,000.

The concept of short sale had been in the news. The bankers to whom I spoke to on the phone were overwhelmed. I also perceived that they had little knowledge about what to do to assist clients in positions like mine. The confounding effects of the real estate crash created an absence of information regarding short sales and other details that changed daily.

Fortunately, my agent knew more about short sales. She took over my phone calls to the bank and found herself in the position of telling the bank what to do. My agent knew that a short sale would be a good opportunity for me. There would be some forgiveness from the bank for the difference between what I owed and the lower amount of any potential sale.

One banker suggested that I quit making payments in order for a short sale to be considered. By not making payments, I was meeting one of the conditions for short sale. I submitted a letter of hardship saying my divorce and retirement prevented me from making payments.

In late January, a potential buyer made an offer of $197,500. My real estate agent agreed to a lower commission as part of the short sale. The closing occurred on March 9, 2009. The bank forgave me for the difference between my mortgage and sales price.

One regret is having my brother buy the property in the first place! I should have rented a residence. Secondly, I learned that for the two months that I did not make payments to the bank and the listing of the sale as “short”, my credit rating dropped.

A third regret is my failure to pay attention to financial trends. If I had, I likely would have rented.

Experience is a wonderful teacher. My advice to others is:

1. Use caution with real estate purchases, especially in times of personal change.

2. When coming out of a divorce and/or into a situation like retirement, do not rush into major financial decisions.

3. Be wary of loans. No loan should be as easy to obtain as the one I did when I bought the condo from my brother. The financial psyche of the time caught me. Zero percent down. No fees. No problem?

4. When it is time for the sale, choose a real estate agent who has the tenacity to make any contact, and learn all that is evolving in the market place. If my agent had not been vigilant, I might still own the unit.

A similar unit down the street from mine sold in June 2014 for $154,000. I am glad the short sale provided me with the opportunity to sell when I did.