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Old 05-01-2008, 10:56 AM
 
180 posts, read 738,885 times
Reputation: 86

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Below is article from Tampa Florida Real Estate Blog. I am curious if this is true and that short sales are not sold at the initial price as advertised from the banks.

"...For many short listings, it has nothing to do with the market value of the home. It’s simply a number dropped low enough to entice a would be buyer to make an offer (market value?). The seller signs off on the offer and presents it to the note holder, and pleads a hardship case. The bank, or holder of the note, solicits an independent opinion of value, and makes a decision to either approve the sale, or counter the buyer’s offer with a higher number.

Quite often the bank comes back with a number that was much higher than the listed price or, phantom number. The bank has to consider many factors, including estimated market value, payoff on the loan, the costs involved in the sale, etc. The bank, in trying to mitigate its losses, will attempt to get the highest price possible.

So many would-be buyers are getting frustrated by waiting months for third party approval, only to find out the bank wants an even higher price than what was listed. The phantom number effect. A disclosed bait and switch? Is it fair to list a home for sale at a short number without first getting the bank’s approval? Banks most likely don’t want to approve any number until an offer is presented and a clearer picture of the market is available. Sure, the fact that the listed price will be short has to be disclosed. Our MLS requires certain language be included on the listing:"
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Old 05-01-2008, 12:28 PM
 
Location: Hernando County, FL
8,488 posts, read 18,673,036 times
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Many do sell above the listed amount but you need to keep in mind that most short sales are not bank approved short sales.

The seller and list agent come up with a number and then start taking offers to present to the lender. Many of these are off the top of the head and represent no market analysis.

Only a very small percentage are actually bank approved short sales where the bank has come up with the asking price.
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Old 05-01-2008, 03:39 PM
 
1,832 posts, read 4,700,953 times
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Ditto Mike Peterson. I tried to close a deal with a short sale and had the WORST TIME EVER even getting the bank to return my calls, which they NEVER did for 4 mo until the house was a few weeks from being foreclosed. Even then, the bank insisted that the seller take out a loan for the balance between the offer and what they owed. They preferred to just go into foreclosure rather than owe the bank for 15 years on a house they no longer owned. Their credit had already been ruined by not making their mortgage payments.

It's very frustrating, and it makes me wonder what all that money toward PMI is for if not for exactly this situation!!

I really would not recommend buying a short sale unless you are very patient person. The house I worked on had been bought in 2006 at the peak and the buyer's offer was fair market value now (about $20k less than the mortgage). Why should the buyer pay more? They shouldn't in this market. You're better off buying a house that's priced right and not in a distressed situation.
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Old 05-01-2008, 05:10 PM
 
384 posts, read 2,075,523 times
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I just put in an offer on a short sale, so I am disappointed by this report. I guess I will have to wait out the 45 days to see if my offer is rejected. It is too bad that it can be listed in MLS for a price that will never really be obtainable. There should be some more rules for this false "advertising". In the case of the house I am trying to buy, the bank told the agent to keep lowering the price to create a bidding war but no one else has put an offer on but me so far. It does take a lot of patience.
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Old 05-02-2008, 06:15 AM
 
Location: Out of the frying pan....
151 posts, read 729,859 times
Reputation: 131
Hey, Sue! Where did you decide on???

(from the still-confused home shopper!)
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Old 05-02-2008, 06:54 AM
 
384 posts, read 2,075,523 times
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Mrs Coach, I sent you a message. Warning, there are a lot of typos! I had a 2 year old pulling my arm while I was trying to type!!
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Old 05-02-2008, 07:08 AM
 
15,850 posts, read 33,203,105 times
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The thing is, I was told by a realtor that the MLS listing is supposed to be the amount the bank has ALREADY AGREED to - I see way too many listings that say "possible" short sale - which means they haven't even approached the bank yet. There are way too many realtors out there without enough experience in doing them, and they are complicated and time consuming. I personally would not mess with one. Better off probably just to find one that is already bank-owned.
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Old 05-02-2008, 07:33 AM
 
1,832 posts, read 4,700,953 times
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In my experience selling a short sale, the bank only specified that it had to be listed at fair market value. I ran my comps and listed it as such--and FMV was less than the buyers had paid in 2006, unfortunately!!

I do think you'll have less hassle with a traditional sale (prices are so good anyway) or one that's already bank owned. Unless you are in love with the house and it would have been your first choice anyway, I'd just be prepared to be frustrated and patient!
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Old 05-02-2008, 08:32 AM
 
26,799 posts, read 41,527,313 times
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In Oak creek there was a home listed for $ 150 K, it was off the market soon and later back on for $ 180 K. So IMo the low offer was denied.
IMo many realtors are trying to get clients by putting low numbers so clients will call and than try to get their business.
In new River there was a short sale for a 3475 sqft $ 249K which is very low. We called the realtor and make some appointments but the either the realtor didn't show up or the owner didn't open the door. Soon after the realtor told me a family member had made an offer and it was off the market. A couple of months later the home is back on the market for $ 229K and the story the realtor is telling is that the family member couldn't get a mortgage and a cash buyer walked away...... We set up another appointment and since the realtor stated he was 2 hours away he notified the owner and we went for the third try to see the home. Agaian nobody opened the door so we lost interest.
On many short sale listings when you call it seems that the realtors want all my info to try to help me find something else...since I'm interested in that specific home, i don't understand why I have to tell them what I'm looking for since the listed home has my interest.
Another short sale we had an offer on which was denied and weeks later we made an even lower offer which was denied too but at that time we were told our first offer would be accepted if we would consider it again... After many months of the market only going lower we decided not to do that. Last week I heard there is another investor who made an even higher offer than our first offer,and the realtor told me the rules have changed and a pending offer (even on a short sale) is causing the listing to be taken off realtor.com. So we wil see when homes get back on realtor.com.
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Old 05-02-2008, 03:15 PM
 
Location: Tampa
2,119 posts, read 3,356,093 times
Reputation: 2940
I can't stand all these short sales. Where are all the normal sales??? I can't wait four months for an answer...IF I get an answer...and, to be bound to that one and only contract for such a long period of time only to be disappointed.

Am I the only one who realizes it's not a buyers or sellers market? It's really a LENDERS market since they're the final party deciding on who gets what and for how much.
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