who comes up with SHORT SALE pricing? (short sales, real estate) - Phoenix area - Arizona (AZ) - City-Data Forum

skycrane · 05-31-2010, 08:03 PM

This was being discussed in another thread. I didn't want to hyjack that thread so I thought to start my own.

Question? Why are short sales being priced all over the map? I've seen some priced for $90k with comps in the neighbourhood listed in the $300k range. Than that same house gets a contract for $250 or worse the bank rejects the accepted offer and wants $250? What gives? Why would anyone price a short sale without asking the bank what they would accept? Makes no sense? After the 3-6 month wait for the bank to elaspe the property is vacant and rundown and the bank rejects the original low accepted offer, than proceeds to re-list and eventually go to auction for even less?

AZJoeD · 05-31-2010, 08:22 PM

Typically the price is set by the Listing Agent with agreement of the Seller. Some of the more recent HAFA eligible SS are pre-approved by the bank.

In theory the price should be based on the comps for the area, but different agents have different strategies for pricing.

Generally, it all works out in the end because the bank will do several BPOs and Appraisals prior to accepting. So regardless of the list price the home should end up selling for market price or close to it.

Zathras · 05-31-2010, 08:48 PM

Quote:

Originally Posted by skycrane

This was being discussed in another thread. I didn't want to hyjack that thread so I thought to start my own.

Question? Why are short sales being priced all over the map? I've seen some priced for $90k with comps in the neighbourhood listed in the $300k range. Than that same house gets a contract for $250 or worse the bank rejects the accepted offer and wants $250? What gives? Why would anyone price a short sale without asking the bank what they would accept? Makes no sense? After the 3-6 month wait for the bank to elaspe the property is vacant and rundown and the bank rejects the original low accepted offer, than proceeds to re-list and eventually go to auction for even less?

because the banks take many man-hours and months of elapsed time to assess a short sale. They're not going to go to that trouble unless there's an offer on the table.

I think the banks just have so much volume and inventory right now that they can't go any faster. I also think that in some cases they're making miscalculations as well. We had an offer on a short sale that had 2 liens. The first accepted, the 2nd did not (same bank ironically), and now it is going to auction starting at about 58% of what our offer was. Crazy.

Skywayy2001 · 05-31-2010, 09:59 PM

There is generally only one point to short sale pricing...to get an offer. The reason being is because banks won't start negotiating a short sale without an offer on the table. Thus, it's really just a ploy to get the process started. The house sells for the comps at the end of the day. This is why so many short sales are priced so low..just to get an offer..it's a mirage.

skycrane · 05-31-2010, 11:04 PM

The whole concept of a short sale is backwards. It takes an hour to figure out the comps and what the house should be priced at so I don't get why the bank takes months?

Why reject the short offer only to go to auction and get less? The banks are in a lose lose situation either way. Why not take the higher offer and take the loss early than a bigger loss later?

One more question, if the property is appraised for more than the offer does the bank ask for more money typically?

Mares84 · 06-01-2010, 07:18 AM

Quote:

Originally Posted by skycrane

The whole concept of a short sale is backwards. It takes an hour to figure out the comps and what the house should be priced at so I don't get why the bank takes months?

Why reject the short offer only to go to auction and get less? The banks are in a lose lose situation either way. Why not take the higher offer and take the loss early than a bigger loss later?

One more question, if the property is appraised for more than the offer does the bank ask for more money typically?

My husband and I bought a house in 06 with a payment starting at 827 without our taxes escrowed. Then the lender decided to escrow them in without ever asking us!! They also adjusted our rate (yes, i know we should have got a fixed rate) that made our payment jump to 2300 a month. We could not afford this and we tried EVERYTHING with the lender to modify our loan. Nothing worked. So we started the foreclosure process. We told them they could just have the house. They said we could shortsale the house and THE REAL ESTATE AGENT NEGOTIATES WITH THEM for the price. We tried to short sale for 9 months. We decided we aren't sticking around for this to sell. It is ridiculous, they turned down 4 offers. This house isn't worth what they want for it. The market is horrible here in Michigan and the house is worth half of what we bought it for. BUT we found out if this house forecloses the lender is covered by getting 80% of the MORTGAGE. NOT WHAT THE HOUSE IS WORTH BUT THE MORTGAGE. So I am so happy they are covered.

We weren't protected against anything. We tried everything to save our home, even the so called modification loan that people with upside down adjustable rate mortgages should get. Nothing worked. So, my point is the lender doesn't have anything to lose by not short saleing they get 80%of the mortgage because they are federally backed.

skycrane · 06-01-2010, 08:29 AM

mares84, the bank is the one who should lose the money not the individual. The whole system is put in place to protect corporate america not the people. I'm sorry to hear about your ordeal. Thanks for shedding some light on the subject, it sounds to me like the short sales are really not a good deal or even worth the wait.

Mares84 · 06-01-2010, 10:01 AM

Skycrane- You are right, who is gonna bail us out because the banks screwed us? Absolutely no one. We just figured it was better to walk away then base our whole life around the bank is going to decide. We have done everything we can. Now they can deal with an empty cold house. We are moving to Az anyways! ha!

rjrcm · 06-01-2010, 12:14 PM

Quote:

Originally Posted by skycrane

The whole concept of a short sale is backwards. It takes an hour to figure out the comps and what the house should be priced at so I don't get why the bank takes months?

Why reject the short offer only to go to auction and get less? The banks are in a lose lose situation either way. Why not take the higher offer and take the loss early than a bigger loss later?

One more question, if the property is appraised for more than the offer does the bank ask for more money typically?

Don't expect logic when dealing with the banks.

If you are talking about the appraisal for the buyer's loan, then no, the banks will not ask for more money if the home appraises for more than the contract purchase price. The appraisal from your lender is between you and your lender, the bank (seller) should not see it. All they need to know is that the appraisal satisfied the loan requirement.

If you are talking about the banks appraisal (or BPO) to check value for evaluating an offer, then yes, they may counter with a higher price.

skycrane · 06-02-2010, 11:13 AM

Sorry for the rant. But the banks make you sign a abdendum stating you cannot ask for repairs etc to be done and the house is sold AS IS. Basically making your offer firm and you cannot ask for more. But if they feel they want more money it's OK for them to ask for more money? Do short sales actually close? anyone have any short sale stories?