Buyer
The price at which is a property is listed is a marketing tool. It is not uncommon for homes to be listed at ABOVE the true market value in the desire to "come down" to what buyers offer. It is also not uncommon for some Realtors to list properties BELOW market in order to attract multiple offers and create a bidding contest.

So it is also possible for the lenders to ask for more money if they think they carn get it If the loans have been sold to investors you may also have investors that change their mind and decide that the property is worth more than the listing price. Most lenders will have the property appraised and share that information with the investors .

Buyer,

I understand your frustration as I've dealt with some of the same things multiple times in the past couple of years representing both buyers and sellers in short sales.

The answer to your first question is yes the final sale price can be higher than the list price. This happens when the banks evaluate an offer for a short sale home and determine that it is too low of an offer and they are unwilling to write off the difference between what is owed and what will be netted from that offer. It happens frequently. The buyer has to make a decision as to whether they believe the house is worth the extra amount the bank wants or whether to walk away from the sale altogether.

Each bank has its own criteria it uses to determine what its bottom line number is for a property. If the offer submitted doesn't meet that bottom line then the bank will reject the offer and will prefer to take it to foreclosure as it believes it can garner more from a foreclosure sale. It seems strange to you and I that if there is buyer willing to purchase the property that the bank would rather go to foreclosure instead of selling it as a short sale, but the decision is purely driven by the bottom line for the banks.

As to your second point with the second mortgage holder, they don't get much in short sales. I've been involved with a couple of sales where the second bank would only accept the $3,000 pay off if the sellers signed a promissory note to pay the balance of what was owed over a period of time. That requirement can kill a deal as well if the sellers are unwilling to sign for a promissory note.

Good luck working through your short sale, but as you can see they aren't the great deal everyone thinks they are.

Scott Sullivan
Realtor
Prudential Network Realty
3535 Highway 17, Suite 10
Fleming Island, FL 32003

C: 904-327-5676
O: 904-269-1716
Scott.Sullivan@PrudentialNetworkRealty.com

Hi,

As the earlier answers are correct, the thing to remember is that the morgage holder, the banks, decide what offer to take. The listing agent puts the property on the market, and suggests a list price. Then when the offers come in, the agent hopes the appraisals and the bank agree and negotiate a selling price.

Lots of offers fal through.

Regards,
Blaine Rabe
904-874-0814

If it is a short sale the bank(s) is not looking for a buyer the seller is, the bank(s) does not have to take less than the mortgage, it doesn't matter what the seller listed it at. what matters is what the bank will take.

Are there 2 different banks holding 1st and 2nd liens to the property?

Or, is there just 1 bank holding 1st and 2nd liens to the property?

When a loan is in default, the bank is in a loss position. So at this stage, it is trying to minimize its losses.

So if there is a different bank holding the 2nd lien, it is to that bank's benefit to negotiate for "any" amount. If the loan goes to auction then into REO status, the 2nd lien bank will have a complete loss...it wouldn't even have the $3,000.

You need to get your agent to negotiate aggressively with the 2nd lien bank because at this stage...it is just a numbers game i.e., how much goes into which pot?

The general price trend in the Middleburg, 32068 area is down. So it does NOT benefit the bank to look for another buyer in a down trend market, which will results in a much higher loss for the bank(s).