Increase in asking prices for houses (Sarasota, Longboat Key: bank owned, comparable sales, for sale)

[Big House]

Also, many homes were nearly through the foreclosure process before the MER / Sterns Robo signing fiasco, which kicked all those foreclosures out, and they had to start from square one. This process takes 6 months, starting with all the required notices being filed and all the court paper work starting from square one, after they go and find a new attorney to handle the foreclosures. All of that adds to the time to bring the foreclosures through to fruition.

In this market, we still have not seen a mounting back-log in the foreclosure process. The follow up paperwork has not scheduled any major increase to the on-coming listings. So it is still months away before any impact will be felt on the supply chain to what is out there - if it happens at much all here in SWFL.

[macyny]

Some banks drop their prices on short sales quickly. A few houses I've been watching have dropped their price twice in a month. Others raise their price. Got an alert today on a house which has been on almost a year listed at $240,000. There were 5 offers over that time period, all denied by the bank. Now the price was raised to $360,000. This house has been sitting vacant for almost a year. Does that make any sense?

[SoFLGal]

Originally Posted by macyny

Some banks drop their prices on short sales quickly. A few houses I've been watching have dropped their price twice in a month. Others raise their price. Got an alert today on a house which has been on almost a year listed at $240,000. There were 5 offers over that time period, all denied by the bank. Now the price was raised to $360,000. This house has been sitting vacant for almost a year. Does that make any sense?

The banks usually don't drop the price on short sales. The list agent sets the price according to the comps.

The home that went up to $360K probably got an approval from the bank and therefore the agent now knows what the bank will accept and changed the price.

[Big House]

Originally Posted by SoFLGal

The banks usually don't drop the price on short sales. The list agent sets the price according to the comps.

The home that went up to $360K probably got an approval from the bank and therefore the agent now knows what the bank will accept and changed the price.

In other words, the original list price did not represent what the bank would actually take. The agent that was given the property to list, was directed to list it at a low tickler number that was never going to be accepted. It was meant to start really low so that it would get multiple offers and get buyers into a bidding situation, that may never even been close to what the bank would actually accept. This was the norm for the past several years, and it really frustrated a lot of buyers that wanted to make a deal.

This situation has improved, and the tactic although still used isn't happening quite as often from what I've heard. I also have heard, from numerous sources that the time it takes to go through a short sale process is taking much less time. It often took several months before the (very frustrated) buyers that proposed found out they weren't seriously considered. Some still made out well, and those that did helped make many others overly optomistic about their chances.

If you are proposing on a short sale, Good Luck! I hope you succeed, and it goes quickly and smoothly. I know that some of the things I suggested in an earlier post will help you make a good offer.

[SoFLGal]

Originally Posted by Big House

In other words, the original list price did not represent what the bank would actually take. The agent that was given the property to list, was directed to list it at a low tickler number that was never going to be accepted. It was meant to start really low so that it would get multiple offers and get buyers into a bidding situation, that may never even been close to what the bank would actually accept. This was the norm for the past several years, and it really frustrated a lot of buyers that wanted to make a deal.

This situation has improved, and the tactic although still used isn't happening quite as often from what I've heard. I also have heard, from numerous sources that the time it takes to go through a short sale process is taking much less time. It often took several months before the (very frustrated) buyers that proposed found out they weren't seriously considered. Some still made out well, and those that did helped make many others overly optomistic about their chances.

If you are proposing on a short sale, Good Luck! I hope you succeed, and it goes quickly and smoothly. I know that some of the things I suggested in an earlier post will help you make a good offer.

When you say "was directed to list it at a low price". Well, not really. They list the property at what the comps come in at, hopefully. Sometimes the appraisal from the bank comes in at a different price. Also sometimes they have it listed at a certain price and need to drop the price because there is no interest in the property. Then they get an offer and the bank doesn't agree with that price. There can be many variables.

I would agree about the approval time. It's gone way down, in most cases.

[Big House]

Originally Posted by SoFLGal

When you say "was directed to list it at a low price". Well, not really. They list the property at what the comps come in at, hopefully. Sometimes the appraisal from the bank comes in at a different price. Also sometimes they have it listed at a certain price and need to drop the price because there is no interest in the property. Then they get an offer and the bank doesn't agree with that price. There can be many variables.

I would agree about the approval time. It's gone way down, in most cases.

Ok, stand corrected. . . I thought the agent that listed the property was told the price to list it for, not just choose a number themselves after making thier own determination of what is the "right" price. That further explains why no one agrees on the number - if the bank didn't determine the asking price, an agent is more likely to list it at a lower number they know will sell. That increases their odds of getting a deal done and benefiting from it. And, concurrently increases the odds that no one will agree on the offers that come in. I thought the banks told the sellers what the shortsale price is going to be, that they had little choice and told the agents what price to list it for concurrently.

Question - Do the agents that list short sales STILL determine the list price themselves? I thought that changed.

[SoFLGal]

Originally Posted by Big House

Ok, stand corrected. . . I thought the agent that listed the property was told the price to list it for, not just choose a number themselves after making thier own determination of what is the "right" price. That further explains why no one agrees on the number - if the bank didn't determine the asking price, an agent is more likely to list it at a lower number they know will sell. That increases their odds of getting a deal done and benefiting from it. And, concurrently increases the odds that no one will agree on the offers that come in. I thought the banks told the sellers what the shortsale price is going to be, that they had little choice and told the agents what price to list it for concurrently.

Question - Do the agents that list short sales STILL determine the list price themselves? I thought that changed.

Yes, they STILL determine the price, unless it's preapproved, in which case the bank would have given them a number that would be acceptable. Like you, I have seen many times where the price that it's listed at is just not realistic. I can do a quick search of the comps and determine pretty close, what the bank might accept.

[Big House]

Originally Posted by SoFLGal

Yes, they STILL determine the price, unless it's preapproved, in which case the bank would have given them a number that would be acceptable. Like you, I have seen many times where the price that it's listed at is just not realistic. I can do a quick search of the comps and determine pretty close, what the bank might accept.

That's really good to know. So if I or others are looking at a short sale, you can see by the amount listed if it is likely (not Positively) that the offer may be within an acceptable range a bank may accept, vs. the intial list that may not really be in the ball park. That is great to know!

Another reason you want a good agent that really knows what is going on when looking at short sales. Even though an agent telling me I need to raise my offer, to submit something realistic, which isn't an easy thing to accept - if your me ((cuz I always know best - don'tcha know)), I understand it, but it is hard to palate sometimes. So, it is good to know that sometimes you (me and others here) get solid, knowledgeable - undetatched advice, from some agents that aren't self serving.

[rockall]

Does the maket value on the trim notice have any bearing on the BPO ? I notice that the market value from the tax dept is usually always lower than the listing price . What do the lenders go by when people are applying for a mortgage ? How do they come up with the appraised value ?

[SoFLGal]

Originally Posted by rockall

Does the maket value on the trim notice have any bearing on the BPO ? I notice that the market value from the tax dept is usually always lower than the listing price . What do the lenders go by when people are applying for a mortgage ? How do they come up with the appraised value ?

I'll start off by saying I'm not an appraiser but I have done 100's of BPO's for the banks. Here is the general criteria they/I usually use. I start out with a one mile radius from the subject property. In all cases if no comps can be found I adjust. Doing a BPO you can go out as much as 5 miles from the subject property. Next you adjust the time frame. I start out with no more than 3 months back, I can go 6 months back, if needed. Then I look at the property itself. They allow for 20% on either side of square footage. For example if the home was 2000 sq ft under air. I would bracket homes from 1600 sq ft - 2400 sq ft. I try to only go 100 or so on either side if possible. Then year built comes into play. 5 years on either side is the norm. So, if it was built in 1990 I would look at properties from 1985-1995. Again, I try to come up with a closer range. Then there are other things to consider-pools, location, construction of the home, condition of the property, if it was a distress sale, etc

Lenders, banks, etc use pretty similar criteria. Now, if you have 20 properties that fit this criteria it is left up to the discretion of the person doing the appraisal or BPO.

It's difficult when you get appraisers from out of the area who don't know the area. That can be a problem sometimes.

To answer your question about the market value on the appraisers office, this has been running about 20% off what a property might sell for, on average.