There is a listing in Alameda CA that has got us shaking our heads.

It's a short sale listing for a ranch style home, 3 bedrooms/2 baths, and steps to the beach. It's listed at $499K. However, the confidential remarks says that the loan "negotiator countered at$594K and needs an offer ASAP."

The listing agent who is from out of the area, was asked why she didn't simply list the price at what the lender wants to cut to the chase. She responded that they do this all the time in Hayward to stimulate interest and get people to show it.

Then she off-handedly says, "This is Alameda, for God's sake. It's not like it's Stockton!"

There are three offers on the table, all above the list price of $499K, but way under what the lender will approve. These offers are going nowhere.

If you already know what the short sale lender will approve, doesn't it make sense to list the property at THAT price so prospective buyers and their agents know what it will take to get the offer accepted?

Sometimes, underpricing will work to stimulate interest and increase the number of showings. And it may even result in multiple offers. But if a willing and able buyer comes along, offers full price with no contingencies, you'd better be prepared to sell it at the advertised list price.

This property last sold for $693K in October 2006, and listed as a short sale in April 2008 for $599K. So foreclosure is looming.

 

 
This post has been included in California Real Estate News Alameda County, CA Real Estate News Alameda, CA Real Estate News
Post is included in group: California Loan Modifications, Short Sales, & REOs
Post is included in group: California Short Sales, REO's, and Foreclosures
Post is included in group: Club Chaos
Post is included in group: REO
Post is included in group: Short Sale REALTORS®

12 Comments on Listed at $499K, but they won't take anything less than $594K. WHAT?

DEC
29
2008
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Geez, this is startling.  In Denver, the agent would likely be reported to the MLS and the local board as unethical.  If the listing agreement states a price that the seller (or lender) will approve if they receive an offer, then that's the price that should be advertised.  To advertise it lower is to open the door to failed offers, miscommunication and loss of the agent's reputation as a straight shooter.
10:38pm • #1

This situation was happening all the time during the hot market  in Oakland. The lenders for the most part do not care. Other agents have turned in these types of agents to the lender and they just do not care. So there is nothing any of us can do about it except be ethical with our own business. We cannot change others we can only change and control our behaviour.
10:45pm • #2
338,367 Points 1 Featured Post Localism Sponsor Outside Blog Hit Router Called Shot Master

From a legal perspective, any realtor that brings an offer meeting the terms of the listing contract, even though the seller is not obligated to accept the offer, is entitled to the commission offered by the seller as per the terms of most listing contracts.
10:46pm • #3
617,285 Points 60 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

Gretchen --- what this caused is a lot of realtors whose buyers became extremely agitated when told that no, the price really isn't $499K, but actually $100K more.

Jean --- a client of one of the agents in the office said he really wants to buy this house. When the buyer's agent called to get the scoop, the listing agent was actually snooty about why she priced it they way she did.  The buyer's agent contacted the MLS about this listing to see if there's an MLS violation. We'll wait and see.

Robert --- and that's what I think these realtors should realize. Several years ago, this happened to one of my co-workers who listed a property. When a buyer came along that offered just $1K over list price, the seller got upset because he was expecting a bidding war. His agent carefully explained to him that because a ready, willing and able buyer came along and offered more than the list price, that even if the seller refuses to sell the house, he would be liable for paying commissions to both  the listing and selling agents.
10:59pm • #4
202,243 Points

Just when you think you've heard it all, along comes a story like this.  :)
11:01pm • #5
617,285 Points 60 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

Bruce ---- this hasn't happened in your neck of the woods (yet?). Guess we're going to see more interesting situations as we plunge into thest times of REOS and short sales. What a roller coaster!
11:05pm • #6
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That sounds ridiculous to me.  Why bother listing it at the lower, unacceptable price?
11:12pm • #7
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Jason --- our sentiments exactly.
11:21pm • #8
DEC
30
2008
960,241 Points 21 Featured Posts Outside Blog

We had someone playing this same game in our area. It is a little mis-leading to the public if you ask me...

Merry Christmas and a Happy New Year!

Charlottesville Santa

your friend in Charlottesville!
6:40am • #9
617,285 Points 60 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

Charles --- it doesn't help when agents do this sort of thing. It only gets other agents and their clients upset. And that agent's reputation takes a hit.thimbl
10:43am • #10
311,726 Points 2 Featured Posts

This is the largest problem with short sales, agents setting unreasonable prices hoping to get interest but have no idea what the lender will take, this is not just unethical in my opinion its Fraud
11:48am • #11
617,285 Points 60 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

Andrew --- in this case, this agent knows EXACTLY what the lender wants. So yes, it's like a bait-and-switch scam.

As for other short sale listings --- when I do a short sale, I do contact the lender first, get the scoop on how much is owed. Although the lenders will want to see an offer first, some will give me an idea of how much they need to clear in order to approve the loan. Then I can factor in all the selling and closing costs, making room for negotiations, and come up with a reasonable list price.
12:18pm • #12

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