Home Buying in 85383>Question Details

Backtoaz, Home Buyer in Chicago, IL

If a bank approves a short sale price, is the corresponding information published somewhere? If so, is it accessable to buyers?

Asked by Backtoaz, Chicago, IL Mon Jan 3, 2011

I was at an open house in Phoenix a week or so ago, and the showing agent told me that a short sale had been approved for 325k. However, the asking price on the house was 299k. When I asked him why there was a discrepancy (e.g. why don't they just list it at what they know the bank has approved), he skirted the issue. That led me to wondering if there was some place that a buyer can look up the amounts banks have authorized for approved short sales. Is this information that a buyer's Realtor can regularly provide, or is this more of a case-by-case thing? Visability to the status and details of short sale properties sure would make life easier when my wife and I are looking at properties online. Any thoughts?

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Dear Back:

The last approved bank price can change. If the house has not sold at that price, it is probably a sign that the price is too high. Aa buyer can submit any offer. All the bank approved price may mean is that the bank will approve at that price. Your agent, if they can justify the recent comparables, condition of the home, placement of the home (busy street, train track etc.) can submit an offer.

Just as selling a home, the seller does not have their rock bottom lowest price. They start higher and go from there. The bank will not advertise their rock bottom price.

The $299K may have been what the seller thought was a fair price. However, they may have set the price low to get interest. Your Realtor will be able to assess this situation for you.

Welcome back to Arizona and have fun with your home shopping. The good thing? You are in the driver's seat as a buyer.

Jeff Masich
Arizona Homes and Land
HomeSmart
Web Reference: http://ArizonaHomesLand.com
1 vote Thank Flag Link Tue Jan 4, 2011
A Realtor can look in their MLS system and find short sales and what they sold for. It is a great piece of data that tells a lot. In my area you find short sales selling for about what they are listed at to above. Why above? Because often the owner and his agent get together and pick a number to list the house for that the bank has never approved. An offer comes in below this listed amount and the bank just refuses to answer either yes or no. Time goes on and more low offers come in - no answer from the bank. Then a higher off er comes in and the bank says no, but a little higher and we will take it and so it happens and sells for a little more than was asked in the listing. The bank is the final ok - not the seller.

Short sales don't go for under list all the time and I rarely see one way under.
1 vote Thank Flag Link Mon Jan 3, 2011
Dan

The answers below are good and help to answer the question you raised. Unfortunately the Short Sale topic is so loaded at every turn.

What was the other offer, was the bank contributing any money to the buyer etc? Why didn't the agent list the home at the approved price? Why might the agent of skirted the issue?

As you consider a move back to AZ you may be forced to question if Short Sales are the correct scenario for you? Short Sale closing times are often controlled by the banks approving the Short Sale. I represented one buyer that purchased a pre-approved Short Sale and we closed in 30 days. Another Short Sale I'm involved in was open for 14 months and never did close. The message I hope you hear is that Short Sales are not for everyone, if you have flexibility they can be fine but if you are trying to move across the country and need a defined time line most Short Sales are not going to work for you very well.

The Phoenix market does still have some very well priced properties at this time, from bank owned, flipped and a few owner occupied homes it looks like a great time to buy. Lets carefully choose the property that fits your needs and time line.

Carefully selecting a buyers agent to represent you as you navigate the market will be very beneficial to you. We work for you, have fiduciary to you and get paid by the seller at closing.

Always glad to answer questions.

Doug McVinua
HomeSmart

"Arizona Real Estate for Sale by a Guy from Iowa"
Web Reference: http://www.McVinua.com
0 votes Thank Flag Link Mon Jan 3, 2011
Wow, thanks for all of your quick replies - sounds like I've got my answer!

I get the economics behind it all, but man do I wish real estate was a more transparent market! :)

Thanks again everyone!
Dan
0 votes Thank Flag Link Mon Jan 3, 2011
When the realtors list a home, it is listed at a price to get an offer. Many times that is the correct price. However, no one knows what the bank will accept until the bank accepts an offer. There is no published list or internet site you can go to that shows what a bank will accept on what home. We don't even know what they will accept. It is a big mystery to all of us in the industry. It honestly shouldn't be, but it is. I would have to say what they accept is case by case. On the same street, different people can have mortages with different banks. One bank will take the buyer's offer at the offered price and the next will want $25,000 more. There is no reasoning behind it other than that they are going by someone's BPO of the property.
0 votes Thank Flag Link Mon Jan 3, 2011
There is no specific place to look up what a bank would approve a short sale for. Although the REALTOR code of ethics states REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations..

The reason the home could be marketed at $299K with an approved price of $325K is the same reason a bank owned home could be marketed at 20% below market value - in order to get multiple buyers interested and have it sell above the list price. He did verbally tell you about the $325K price.

The Seller's agent will eventually receive an Agreement Notice that will have the terms of the sale printed out including sales price. He is probably being honest.

I hope this helps.

Please consult tax, legal and mortgage professionals, before, during and after purchasing any property.
HomeSmart agents and brokers do not give this advice. Opinion only.
Web Reference: http://www.DonaldKeys.com
0 votes Thank Flag Link Mon Jan 3, 2011
Phoenix is in the top 3 markets for short sales. In our market there are lenders who will tell you what price to place on a property and there are some that will not.... There are so many different scenarios that could explain your situation above but to give you a quick answer....NO....there is no published information from the banks on a short sale with the exception of a HAFA transaction, a pre-approved Hud program or some experimental programs that BofA and Wells Fargo have implemented. This information is with the listing agent and is not subject to disclosure without the sellers or bank's permission. My best advice for you is to get an agent who is committed to doing things the way a CDPE agent has been trained. CDPE stands for Certified Distressed Property Expert. These agents have gone through extensive training and are committed to staying in touch with the market. A part of their training is to question the listing agent to get as much information as possible about the short sale. It's great to go out and look at homes on the market to get a feel for things, look at floor plans and become familiar with an area but when it comes to negotiating these days you really need a professional who is trained.
0 votes Thank Flag Link Mon Jan 3, 2011
Backtoaz
some listing agents will state the amount the bank has approved in "some" listings but not all. Many listing agents will have the short sale property priced low to either generate offers (because buyer is thinking it's a good price and thinks they can get for less than that) or postpone a foreclosure or both. The seller generally does not care and will usually accept anything because they are not coming in with any money. If the offer is too low, the bank will sit on it for months or just ignore it. A good offer can take months too. In some cases they make more money letting it go to foreclosure (mortgage insurance). When you find a property you like, make sure your agent pulls the comps to see how it's comparing to other similar sales. This will be a telltale sign if it's really low. I have had clients find a property that's listed for $300K that they want to make an offer on but the listing agent knows the bank will not accept less than $349K so the buyer is VERY CONFUSED to say the least as to the non-logic behind this. Good luck in your search!
0 votes Thank Flag Link Mon Jan 3, 2011
That would be so nice if there was such data available. Yet, that would be a dream. Short sales are never firm. Each is different and anything can happen even right up to time of recording. Shorts sales are like Pandora's box. You NEVER know what will happen. Our market for the mostly bank owned, short sale, investors sales, and very few are traditional sales. Though it does depend on the list price market.
If you are looking to buy here in AZ would love to talk with you more how this all works. You can contact me at 623-326-7594.
0 votes Thank Flag Link Mon Jan 3, 2011
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