Home Buying in 29212>Question Details

Cathy, Home Buyer in 04416

This question is for all the listing agents out there. If you are listing a house and it's a "possible short sale", how do you set the price?

Asked by Cathy, 04416 Wed Nov 14, 2012

Do you attempt to stay, for example, within 10% of what is owed? Does the bank have a rule of thumb or is it all just hit or miss? Also, why don't you say in the listing that it's a short sale or it's a 'possible short sale' ?

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I agree with Phil about listing the house at fair market value. It's not a hit or miss situation with the banks. They all handle their short sales a little differently, but in the end, they have to meet certain guidelines.

We are not allowed to advertise that the home is a short sale in the Columbia MLS. We can notify the agent in our agent remarks section and if you agree, you can post it on a sign rider, but that information will not feed to Trulia or any other automatic feed website.

Make sure you find someone who has experience with short sales and wants to work it. They are a unique challenge in today's real estate world.

Please contact me if I can be of assistance to you with this process.
1 vote Thank Flag Link Wed Nov 14, 2012
As an addendum to my earlier answer, it is true that the CMLS will not allow listing agents to put "short sale" or "potential short sale" in the public remarks. Agent can get fined for doing so. However, I believe that rule should be changed. I am saying this to let you know that it is not the agents being deceptive. They are simply following the rules.

It is a great time to buy, however it is a confusing time for the real estate market!
0 votes Thank Flag Link Wed Nov 14, 2012
Price it at market value which will hopefully be enough to pay the closing cost and break even without it going into short sale - have a preliminary HUD ran for you to see if the numbers work. If the market will support the market value price avoiding the short sale simply have it reflected in the listing that it is a possible short sale which can be avoided with a full price offer.
0 votes Thank Flag Link Wed Nov 14, 2012
Hey Cathy. I have done a good many short sales and most of the banks, but not all, will help in the setting of the price now. That was not the case up to a year ago. You had agents and home owners that would price low to "fish" for offers and you had some that would price according to fair market value. I myself price close to market value and then communicate with the bank to get a figure that they are looking for. We then know what the price is that the bank will accept and don't waste buyers time waiting on an offer that we know will be rejected. If you have any other questions, let me know. Brian.
0 votes Thank Flag Link Wed Nov 14, 2012
Thanks, Brian!
Flag Wed Nov 14, 2012
Hi Cathy, You can almost always get a short sale at a lower price than the comparable properties. There are many factors involved and you may even offer full asking price and the bank will want more. Short sales are a challenge for everyone involved, but you can get an excellent deal if you are willing to go through the process. Foreclosures are much easier and are generally sold at a deeper discount, but not always. There are some in excellent condition and in all price ranges.

I agree wholeheartedly that listing agents should have to make the buyer aware in their listing remarks where the public can see that the property is a short sale or possible short sale because it leads to misconceptions and skews what buyers perceive as property values in that neighborhood. A listing agent's duty is to work in the best interest of the seller and that is to get as many people as possible interested in the listing, so they price it low but they don't say why.

It is very important that you get a buyer's agent who will represent you so that they can assist you in locating a property that will suit your needs and provide you with all of the details on properties upfront so that you are fully aware of any such situation before even looking at it.

Please contact me if I can help. I am an Accredited Buyer's Representative.
0 votes Thank Flag Link Wed Nov 14, 2012
Thank you!
Flag Wed Nov 14, 2012
LISTING PRICE
Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.
Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”
Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)
Different Banks have different philosophies about pricing their properties: You cannot draw any conclusions without a good analysis.
Have your Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. It is the surest way to determine the Market Value of the property.
0 votes Thank Flag Link Wed Nov 14, 2012
The listing price should be based on the recent sales of comparable properties in the same vicinity as the subject home. The home may be priced a little more aggressively considering that it is a short sale.
The general rule of thumb is that the bank will consider any offer but may accept or counter the offer for any number of reasons.
The home is listed as a short when looking at the local MLS Listings. If you are looking at sites like Trulia, Zillow, etc. this info may not appear.
0 votes Thank Flag Link Wed Nov 14, 2012
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