How To Price Short Sales so they ACTUALLY Close!
A prospective buyer just called me and told me he was interested in one of our short sale listings but wanted to know if I was going to pull a bunch of bait and switch cr#$ on him. I asked what he meant and he said he offered on a previous short sale property at $249,900 and then the seller decided to just raise the price 70 days later to $270,000. He got so mad that he canceled and moved on… I could understand why he was frustrated.
I asked if his agent had taken the time to explain short sales to him. He said no, but this had nothing to do with a short sale, the owner scammed me. I told him the following…
When a REALTOR takes a listing, it is up the REALTOR to price the home. In this market, pricing a short sale means doing so in most cases to generate a contract in 30 days. In most areas, that means pricing well under market value. Upon executing a contract, there is a financial package (some banks are more thorough than others) that is then submitted with the offer. The bank (on the seller side) then derives a value to the property and decides if the offer is sufficient enough to accept.
Sometimes, banks accept the offers as is, sometime they are countered, sometimes they are just outright declined. If the deal falls through and the buyer walks, a good thing to come from it, is that we now know where the bank is on pricing the property. Sometimes they are unrealistic, other times it turns out to be a phenomenal deal for the next buyer. Nevertheless, what ever price comes back is most of the time, is the price the listing agent should adjust the listing to. If we already know the bank is only going to accept $344,900 for the property, it makes no sense to market at $309,900. Now if the property is only worth $309,900 then that is an entirely different story.
After hearing about this, the buyer calmed down and was ready to start the offering process now that his expectations were in line with the process.
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