The one constant in working short sales is that they change on a regular basis.  The lenders and their loss mitigation departments are changing their rules as we go on and the sellers are becoming more aware.  Most importantly, the buyers and their agents are also changing with the times which require a short sale listing agent to continue to update their listing and marketing practices.

In the past, I would accept a short sale and initially post it in the MLS for an amount that would allow a potential buyer to pay off the existing debt recorded against the property, using the theory that I could show the lender that we tried to pay off the loans.

However, that good-faith move wasted a lot of time and really did not accomplish very much, other than possibly creating some good will.  Going into December 2007, the playing field is much different than it was just 6 months ago.

Today, which I accept a short sale listing I first determine the fair market value of the property today.  I then calculate 70% of that value and list it in the MLS at this low price point.

I know that the bank will not accept an offer at this price, but it will allow me to get the ball rolling.  Because of the banks self-defeating rules, we cannot negotiate until we have an offer, so I stimulate the buyer pool and come up with an offer in a relatively short time period - I get the ball rolling.

Now, I know that the offer will not even be looked at, in most cases, for at least a month and chances are the initial buyer will disappear by then...and that's OK.  You see, I have an offer on the table and I have opened the channels of negotiation.

Once the bank rejects the offer (which they will do even if you offer 95% of fair market value) they will counter.  Now I can market the property with an approved short sale price; and finding the new buyer is that much easier.

I hope this little tid-bit will be found to be useful to some.

Now Have a Blessed Day,

John Occhi, Hemet CA REALTOR®
Mission Grove Realty

Author of "What You Need to Know...About Foreclosure and How You Can Stop It!" - If you are a Hemet or San Jacinto Homeowner please call (951-443-6259) for your free copy.

This blog and the contents written here is the intellectual property of John Occhi, Hemet California REALTOR®.  The views and opinions expressed are just that - views and opinions of John Occhi and those who comment.  Please note that I am not an attorney or a tax professional and any time I discuss either topic, I suggest you consult with the proper professional for relevant assistance. 

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I am proud to be a full time REALTOR® with Mission Grove Realty who is proud to be a contributing member of the ActiveRain community.