While I was researching short sales in Sacramento for a client this morning, I noticed my MLS profile needed an update. So, I clicked on it to make the change. At the very bottom is a place for additional languages. I typed in Klingon. Well, I don't really know any Klingon words, so I erased it and typed Pig Latin. Hit the Save button. Apparently, Pig Latin is not a recognized language because MLS would not let me save it. Those MLS programmers, always looking out for practical jokers, I guess.
The listing my client asked about is a short sale home in East Sacramento. It is listed for, let's say, $399,000. This buyer can't go above $350,000. He wanted to know if he could buy that short sale for $350,000. Lots of buyers these days seem to think we are in a buyer's market. I suppose they have difficulty interpreting the market because newspapers and TV yak constantly about foreclosures and short sales. But with falling inventory (we've lost about 2/3rds of our inventory over the past couple of years) and rates below 5%, it's a seller's market in many Sacramento neighborhoods.
I researched this East Sacramento short sale. Looked up the owner's name, which sounded familiar, in Realist. Googled the owner. Yup, the owner is a real estate agent. And the owner / agent works at the same company as the agent who listed this short sale. I read the owner's blog. The owner / agent talked about not really understanding short sales nor believing that they close. Those are all bad signs.
Then I looked up the owner / agent's sales production in MLS for last year. The agent qualified for Master's Club. Doesn't appear to be hurting financially. I ran the name in the tax rolls. The owner / agent owns quite a few other homes in Sacramento. It would appear that the owner / agent may not have a hardship and may not understand that a hardship is generally required to do a short sale. I could be wrong, but I'm probably not.
Well, maybe the owner / agent's real estate buddy has short sale experience? I entered that name as a listing agent into a search for all sold properties from January of 2009. Not a short sale among them. I can tell by the DOM. If the listing agent has never closed a short sale, that's a red flag because the listing agent controls the entire transaction.
I have sold several homes in this particular three-block area, some of which were my own listings, so I know it pretty well. Well enough to know that the market value of that home is more than $399,000, so the bank will probably reject offers at list price. This means a lowball offer won't stand a chance.
I presented this information to my client and asked: "Do you really want to buy that East Sacramento short sale?" I have a feeling he's going to say Ixnay.