nsr
You are talking to someone that has done close to 100 short sale lisitngs and knows the scenarios you laid out as well as anyone. However, there are alot more people like that out there than you think. I have 3 clients right now with all cash who would have bought a home like that in a heartbeat. Over the years I regularly run into people over 60 with all cash looking for a 1 story ocean view home. I used to work in the businest office in this area and not a week went buy that at least one agent didnt stand up at the weekly meeting asking if anyone knew about a 1 story real ocean view home w? at least 2000 sf coming up. It is unquestionably the hardest to find and hottest commodity out there. You put that house on the market as an equity sale at $1M, clean it up a little, make it easy to show and within 30 to 60 days it would have sold.
SD R
Its not hard to put a listing in and say no showing in the remarks and then remove that once you slip your own buyer in. There are so many ways it could have been played to their advantage. They are a small player and probably dont know or care about the risks. We all know there is little to no enforcement any way. It really sucks but it is what it is.