Is the price listed on a short sale what the seller expect for an offer or is it bait and switch?

Asked by Melissa Shriver, Corona, CA Wed Feb 9, 2011

I can't tell if list prices of real or bait ans switch. I cannot get realtors to respond to emails asking this question on the actual listing

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21
Oggi Kashi, Agent, San Francisco, CA
Thu Feb 10, 2011
Melissa

It's not like that. They initially have to price the property lower than market value to get the short sale process started with the bank. The seller is supposed to get nothing from the sale - they just want out. It's the bank or the lender that drives the process.

If you want a response from short sale listing agents, please hire a buyer's agent to represent you. Most times listing agents of short sales are barred from representing both buyer and seller.

Oggi Kashi
Paragon Rel Estate Group
Web Reference:  http://www.oggikashi.com/
1 vote
Helen Chong, Agent, San Jose, CA
Thu Feb 10, 2011
Hi Melissa: a lot of times the listing agent would post a super low listing price on a property, to lure in an offer. the reason is that, as soon as they have an offer, they can submit it to the bank and start the short sale process. He/she thinks that they most likely will lose the 1st buyer due to the amount of time it takes to get the short sale approved anyways. So after 1,2,3,4, months of waiting and they finally found out how much the bank is willing to accept, they'll then market it at the "approved" price. It's truly a dirty strategy in my opinion, but I have encountered many listings that have unreasonably low listed price. I have to explain this to my clients each time. On top of that, many times these listings agents are not responsive because they are bombarded by so many questions or interest about their LOW listing price. Ultimately, the seller's bank will be the one to approve it and the bank will not approve the price if it's way below market value.
1 vote
Lydia Kray, Agent, Corona, CA
Wed Feb 9, 2011
Hi Melissa,
A home when listed is suppose to be listed at market value upon reviewing comparable. When you have a Realtor submit an offer for you make sure they produce some comparable priced homes . That goes for any offer. When i put in offers for my buyers I do research first in order to make an educated offer.

Lydia Kray
Tarbell Realtors
951-733-1058
Web Reference:  http://www.lydiaKray.com
1 vote
Lydia Kray, Agent, Corona, CA
Tue Mar 1, 2011
Hi Melissa,

I am a Realtor that lives in works in the Corona Eastvale area and it is unfortunately the case for MOST shortsale listings and foreclosures in 92880. I have to explain to my clients that shortsale listings and specifically in Eastvale list them lower than market value to get attention.
Ultimately you need a buyers Agent to represent you. Going around driving by signs and calling agents will only make you very frustrated.
Please let me know if you need an agent from 92880. I'd love to be of service.

Lydia Kray
Tarbell Realtors
951-733-1058
Web Reference:  http://www.LydiaKray.com
0 votes
Cameron Novak, Agent, Corona, CA
Tue Mar 1, 2011
The answer to this short sale question is simple Melissa. Have a competent real estate broker run comps on the property in question. The approved price is likely to be very close to the value provided based on accurate comps.
0 votes
Elise Timpe, , 92882
Thu Feb 10, 2011
The list price on a short sale usually depends on the agent. The seller gets nothing from the sale except possibly a shorter time until they can buy again.

In any listing, there are 3 ways to price it:
1) Auction Pricing: This is designed to get multiple offers and hopefully getting it bid up to it's maximum price.
2) Market Pricing: The most widely recommended form of pricing. It's priced at current market value.
3) Overpriced: Generally discouraged by agents, this is for the benefit of the hopeful owner who believes that either their home is worth more or asking more will give them "negotiating room". It is also used when the agent "buys the listing" by telling the owner that their home is worth more than the competing agents told them in order to secure the listing.

You will usually see #1 or #2 in a short sale. The bank will order a BPO (broker's price opinion) or appraisal during their decision making period. They will not accept a price well below market value.

When offering on a home, get your agent to supply you with a CMA (Comparative Market Analysis), which is very similar to a BPO. This should give you the price range to make an acceptable offer.
Web Reference:  http://coronasbesthomes.com
0 votes
Lydia Kray, Agent, Corona, CA
Thu Feb 10, 2011
Hi Melissa,
it is wise to have a Buyers agent working for you. When you go directly to the listing agent there number one priority is serving the seller since they are the listing agent. There are no shortcuts when you go directly to the listing agent. Just something you need to keep in mind. Again a buyers agent is working for you & representing you the buyer. Please let me know if I can be of service to you. :)

Lydia Kray
Tarbell Realtors
Corona
951-733-1058
Web Reference:  http://www.LydiaKray.com
0 votes
Harold Sharpe, Agent, Menifee, CA
Thu Feb 10, 2011
Hi Melissa,
Short Sales need to be sold at market value. Then again so do most all sales.
When you find a property you like just ask your agent for the comps and go from there.
List price on a house in America is like the price for a blanket in Tijuana.
I will say most agents do try to list the price accurately, however the list price is up to the sellers.
Some agents may convince their sellers to list a price low to "get more activity."
The problem with listing a home price low, is some buyers are at their max when looking for a home.
This strategy is annoying to many buyers and buyer agents, but unfortunately many listing agents never represent a buyer so they know not what they do wrong. The houses listed under value usually fail at the short sale and usually go to foreclosure.

Harold Sharpe - Broker
So Cal Homes Realty
(951) 821-8211
harold@socalhomesrealestate.com
http://www.socalhomesrealestate.com
California Department of Real Estate Broker License # 01312992
0 votes
BG, Home Buyer, Phoenix, AZ
Thu Feb 10, 2011
You can check and verify this on your own just by using data here from Trulia. Pull up the latest sold prices for similar properties (REO or Short), and then compare with listing price. If listing is 20% (%more or less depend on you) less than sold prices then it is a bait and switch from the listing agent. Actually, listing agent can't switch because it is not his/her call for the final sale price. It is the bank. He/she got your attention in the property didn't he/she ??
0 votes
Jane Grant, Agent, Aguanga, CA
Thu Feb 10, 2011
Melissa: Your question is a great example of why buyers need their own representation. If you were to have you own agent that agent would go over the "Recent Sold Comparables", with you for each area and even each home you are considering placing an offer on.

Many short sale agents list their short sale listing on the low side, just to get offers. Then when they choose the best offer and submit it to the bank the bank will not accept the offer if it is much lower, or any lower than, "Recent Sold Comparables".

Buyer's are left feeling like they had an accepted offer when in fact, "ALL SHORT SALES ARE SUBJECT TO, BANK APPROVAL. In other words "Seller", signs the offer and accepts it but the bank has the final say.

Banks will always do a Broker Price Opinion and accept offers based on the Broker Price Opinion which is based on: RECENT SOLD COMPARABLES.

If you don't have a Buyer's agent get one that can show you all of the listings in the area and let you know what homes are really selling for.
~~~

~~~~
0 votes
Garrigus Real…, Agent, Redlands, CA
Wed Feb 9, 2011
It completely depends on the listing agent. Although I can tell you bait and switch is advertising a property for the sole purpose of 'switching' potential buyers to a different property. Bait and switch is frowned upon by the law for obvious reasons.
0 votes
Dallas Texas, Agent, Dallas, TN
Wed Feb 9, 2011
Have your buyers agent make the required calls. Majority of time list price for short sale is approved by the bank clear all other outstanding fees due
0 votes
Diana Margala, Agent, Rancho Cucamonga, CA
Wed Feb 9, 2011
Hi Melissa:

Remember that the goal is to get an offer so that something can go to the bank and stop the home from going to sale (auction). Many agents believe that by pricing it lower than the actual value, they will get a lot of activity on the home and they will receive an offer quickly. And many times they will receive multiple offers so that the seller can choose which is the best offer (or buyer) and then send that one to the bank. The problem with that is the bank will usually not sell it for much under market value, so if it is priced to low, they will usually counter with raising the price.

Because of this you need a buyer’s agent that can help you to determine what the value of the home might be, by providing you with the information of recent sales of a comparable home in the same area as the listed home. If you have that information, you will have an idea if you will be able to afford the home, if the bank comes back with a higher purchase price.

Diana 909-560-0145
0 votes
Deborah Nance, , Corona, CA
Wed Feb 9, 2011
Hi Melissa, I'm not a currently practicing Realtor, but here's my answer. I'd do my own research on the value. Homes generally will sell for what they are worth and if the asking price is too low, common sense says "if it sounds too good ...." you know the rest. The bank who has to approve any short sale isn't going to agree to any more loss than they have too. I

'd recommend you work with an ethical, honest and hardworking Buyer's Agent who will get you pre-approved with a good lender and then go for it. This is definitely the right time to buy!
0 votes
Ray Wright, Agent, Riverside, CA
Wed Feb 9, 2011
Many times, it all depends upon the individual Realtor and the market conditions at the time of the offer.

When I list a short sale, I place the listing on the market at a fair market value based upon the comparable homes in the area. Once an offer is submitted to the short sale lender, they will have another Realtor conduct an inspection and provide a report with what they consider a fair market value. I've had several offers go thru at or very near the price I originally set. However, in this volatile market, prices fluctuate and once in awhile the value may go up.

When I work with buyers on a short sale, I again conduct my own valuation and provide them with what I believe is a fair market value the bank should accept. We make our offer based upon that valuation and the listed price.

Sadly, there are Realtors out there that are not experienced in short sales. You can usually tell the Realtor is inexperienced when you come across a home listed at a ridiculously low price for the market. I think this often wastes the buyer's and the buyer's agent's time.

The solution is to partner with an experienced agent who can guide you thru the process and give you the best advice in regards to each individual listing. Good luck with your search!
0 votes
Kamerin Vince, Agent, Corona, CA
Wed Feb 9, 2011
The price can be what the bank has agreed to accept or it can be an agent trying to get any offer in an effort to postpone foreclosure and allow the bank to counter with a more realistic price, it depends on the listing agent. That is why experience is needed to determine who the loan is with, is there more than one lender, what is the likeliness that the listing price will be approved, etc. A good tell is if the listing says "subject to lender approval" as that often means that the negotiation has yet to begin with the lender(s). Most agents are now putting in the description "approved at X price" if they have began negotiating with the lender on an acceptable price.
Web Reference:  http://www.kamerinvince.com
0 votes
Michael Chal…, , Odessa, TX
Wed Feb 9, 2011
Short Sale Resources in California

You could get several points of view on short sales, so I would advise you to visit local realtor resources that have participated in short sale of homes in California.

These purchases are legitimate forms of achieving home ownership; however it can be like picking beautiful thorny rose in that you might get pricked by some issues before enjoying your “rose”.

I recommend some research at http://www.shortsaleforeclosureblog.com/ which details several short sales experiences in California and around the county. These resources are likely to produce professionals that work in the short sale niche. As always vet these professionals and get to work on finding that perfect home.

“Take calculated risks. That is quite different from being rash” George S. Patton
Michael Chalambaga
BROKER ASSOCIATE | Realtor
DeRiso & Haynes Realty - Texas

All information is provided "as is" with no guarantees or warranty. M. Chalambaga © 2011
0 votes
scott farmer, Agent, Scottsdale, AZ
Wed Feb 9, 2011
This isn't a "bait and switch" practice by the bank, it's a bait tactic by the listing agent. Same property just will be sold to the highest bidder in many cases at a price approved by the bank since the bank is allowing it to sell for less than the current mortgage owed by the present owner.

Sandy Farmer
Realtor, GRI, CSSN
John Hall & Associates
homesales411.com
Web Reference:  http://homesales411.com
0 votes
Wendy Junk, , Corona, CA
Wed Feb 9, 2011
Bait and Switch unfortunatly.
It should not be that way. Banks will always do a BPO and want an offer at market value. Not only that. My personal belief is that, that is a dis-service to the sellers. Buyers are smart they will stay way from those listings. Giving the seller less exposure.

Prudential California Realty
951-751-2299
0 votes
Janet Fraser, Agent, Corona, CA
Wed Feb 9, 2011
What property are you inquiring about?

Janet Fraser
C21 Award
909 730 2929
0 votes
Cameron Novak, Agent, Corona, CA
Wed Feb 9, 2011
It's a bit of a complicated subject, but the short answer is that much of the time the asking price is LOWER than the bank will accept.

Once you submit an offer, the Short Sale Package is then forwarded to the bank which reviews it. Many times, the bank will determine that the house is worth more than the asking price the home owner set. In this case, they will counter the buyer's offer.

Hope this was helpful.

Cameron
The Homefinding Center
951-212-7479
0 votes
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