Question Details

Ron Bell, Real Estate Pro in Reno, NV

Does anyone know if there is a limit either ethically, legally or board rules how low short sales can be?

Asked by Ron Bell, Reno, NV Tue Mar 11, 2008

listed. I am seeing a lot of bait and switch/hypothetical pricing that is way below what the bank would take. Sure it may make the Agent's phone ring but at decreasing neighborhood homes expense.

Ron Bell
Reno Homes Realtor

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Ron, I've run into "Short Sales" in the MLS and when wwe submitted the offer we were told that in fact they had never established with the lender that the lender would entertain a short sale! I personally believe this is a disservice to the Seller, the Buyer, and to our Profession.

There is no set Rule of any kind...it is at the complete discretion of the lender and and the nature of the hardship that is causing the short sale.

I am finding it dificult to get the lenders to respond, even when I have the authorization letter from the seller. As a result I am looking at all of these "Short Sales" with a bit of a jaded eye

JD Weisenburger, GRI, Broker-Associate, Vanguard Realty, Inc. GMAC Real Estate FLORIDA
0 votes Thank Flag Link Fri Mar 14, 2008
The 80% rule is a guidline that lenders like to follow, however, given the country's economy at this time, I have had some get accepted that were giving up 80%. I got an acceptance today on one that gave up 90% on the second mortgage. There is no hard and fast rule on this.
1 vote Thank Flag Link Thu Mar 13, 2008
From what I've seen, 80% of as-is market value. If home is a fixer upper, buyer could bid lower with a supporting bid for repairs. And no we're not talking about bid for a luxurious repairs, but repairs to bring home back up to comparable neighborhood homes. As-is value needs to be supported by good comps in local community.
1 vote Thank Flag Link Thu Mar 13, 2008
no limit that I am aware of. I just closed on that netted the bank only $17,000 and the mortgage amount was $84,000, and I got paid a FULL 7% commission plus a processing fee. It depends on the bank, the investor, and the negotiator.
1 vote Thank Flag Link Thu Mar 13, 2008
It is up to the bank and the luck of the draw with who you get at the bank that is handling the deal. I just did a deal which was a bear at first, then I got another person to deal with and the price dropped faster the Govenor of New Yorks approval rating.

I did do a complete "needs list" on the home for the bank with written estimates to complete the "needs list". Once they saw this, my low offer seemed much more reasonable.

I also think my timing may have been good. It was the end of the month and they had to opportunity to get it off the books thus making their bottom line look better. That might have had nothing to do with it, but we got our deal and that is what counts.

Bottom line, in this market I would make any kind of offer to get the dialogue going. Justify your offer and be patient.
1 vote Thank Flag Link Wed Mar 12, 2008
Hi Ron. As far as I know, no. There is no legal or ethical limit or guideline. I have been on the pro stands committe forever and chair for 10 yrs. It basically comes down to what the bank will accept.
Ellen M. Cassidy
Associate Broker
Southampton, PA
1 vote Thank Flag Link Wed Mar 12, 2008
Ron,
From what I heard and my own experience lenders don't like to go more than 10 to 20 % below the Fair Market Value. Of course this my differ in different areas, but is not a bad "rule of thumb".
Web Reference: http://www.cimpler.com
1 vote Thank Flag Link Wed Mar 12, 2008
Artur Urbans…, Real Estate Pro in Burlingame, CA
MVP'08
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Yes, I realize that generally is the case, so knowing that as an Agent, is there a legal, ethical or sometimes board policy violation if someone goes say 25% or more off loan encumbrance. I see a lot of it in my area and it is a waste of time and creates artificially low active comps.

Ron Bell (again)
0 votes Thank Flag Link Wed Mar 12, 2008
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