The Massachusetts Association of Buyer Agents (MABA) is warning homebuyers away from short sales.

Short sales – in which a bank allows a property to be sold even though the purchase price will not pay off the mortgage – have gained a larger share of the market nationwide. The option is popular for the many sellers underwater on their mortgage, in which they owe more on their mortgage than the home is worth on the open market.

In Massachusetts, a recent analysis by Banker & Tradesman found that more than 10 percent of homes bought during the boom may be underwater. Short sales are widely seen as a better alternative for both banks and homeowners if the homeowner is in default, and many owners who are current on their mortgages are also seeking shorts, as circumstances compel them to move.

But even though short sales are taking up a greater share of the market, many buyers aren’t fully aware of the trials and tribulations involved in the transactions, according to MABA President Sam Schneiderman.

"Buyers are thinking short sales are great deals – but it hangs you up for two months, three months, six months," he said. "Whatever your timetable is, it’s bound to not co-operate."

Even when buyers are ready to and willing to meet all of the seller’s demands on, it still may not be enough. Schneiderman said he has a current client who put in a cash offer on a short sale at the full asking price, only to watch as the the bank raised the price because it had more than one offer. The buyer was willing to meet the new demand, and increased her offer, but still hasn’t closed on the home, according to Schneiderman.

"[She] has a cash offer on the table….and the bank has yet to say ‘we approve this short sale,’" he said.

Even though banks have made efforts to speed up shorts in recent months, Schneiderman says such problems are endemic to the short sale process, with the buyer almost always left hanging while the bank frets and bickers with the seller and any second or third lien holders.

According to MABA’s figures, depending on the market, 30 to 50 percent of short sale deals never close. In the meantime, buyers face serious opportunity costs, as other suitable houses may be snapped up while the deal languishes.

Still, even MABA admits that given the incredibly thin inventory in today’s market, there may be some buyers for whom a short sale makes sense. Buyers who have the flexibility to wait can get one done.

But bottom line: "You can’t put all your eggs in one basket, especially when the basket has holes in it, and that’s a short sale," Schneiderman said.