Published: Aug 26, 2010 11:30 PM EDT
Updated: Aug 26, 2010 7:07 PM EDT

PORT CHARLOTTE, Fla. - First-time home buyers are taking advantage of what seem like killer deals; but they include terms like pre-foreclosure and short sale.  So what does it all mean?  One Southwest Florida woman found out the hard way and is now out more than $4,000.

Barbara Sparrowgrove had a little cash and big goal: buy a home for her son.  She found what she thought was the perfect home through a web site.

"They didn't call it a short sale, it was listed as a pre-foreclosure so I didn't understand all that it meant, all that it entailed," Barbara tells WINK.

That pre-foreclosure was another way of saying short sale.  That's when the owners are in danger of going into foreclosure and try to sell the home first.  The problem, though, is the bank that holds the loan, has to sign off on the sale.

"I put earnest money down on February 2nd and every month we signed extensions, for one reason or another, their reason, or mostly the bank's reasons, or they wanted more information from either myself, or proof of money or they needed something from the seller.  It was crazy," Barbara recalls.

Six-and-a-half months after the homeowners agreed to Barbara's $42,000 cash bid, the bank rejected the deal and asked for $65,000.

"I have no idea where that number came from," Barbara says.

We spoke to the realtor who's based out of Orlando and she told us that she also has no idea where that number came from.  And when she notified the bank that it was way too high for the market, she says the bank wouldn't listen.

After nearly 7 months of waiting, Barbara has walked away without the home.

"I don't need that headache.  My money is just as good as anybody else's," she says.

Barbara's son would have been a first-time home buyer, but because the deal took so long to fall through, there's not enough time to qualify for the first time home buyer credit.  The Sparrowgroves also paid $70 to get the lawn mowed twice.

We contacted the bank, Bank of America, to ask what happened.  This is BOA's full response:

"We had multiple requests for a short sale on this property.  Originally, the interested buyer was listed as "Florida Realty Rescue".  We working on processing the short sale when on June 1, we were notified that they were no longer interested in the property.

On June 18, another short sale offer was place in Ms. Sparrowgrove's name.  Since the initial appraisal was completed on March 15, we had to complete another broker price opinion which came in higher than the original appraisal which influenced our counteroffer back at $65,000. Today, we spoke to the agent and explained that the value of the home came in much higher than the original valuation earlier in the year.  If Ms. Sparrowgrove's [sic] is still interested in purchasing the property, we asked the real estate agent to supply us with comps so we can dispute the current valuation of the property."

We spoke to Barbara again after this statement and she told us she has moved on completely and is looking at other properties.