How are you pricing your short sale listing?

By
Real Estate Agent with Realty Executives

I recently sat through a teleseminar regarding short sales and the instructor had some interesting ideas regarding pricing on short sales to which not a lot of agents in my area are subscribing. He said that he always prices his short sale listings at market or maybe even a little bit above.  Hmmm...my first reaction was wow, that's kind of scary to think about doing. What if the house sits and doesn't sell?? Right?

Pricing a short sale listing at or slightly above market will prove where the market really is for this property. If you are doing your due diligence as an agent you will have full listing history and showing history for the property, correct? So if and when the bank comes back to you as the listing agent and says we want X dollars for this property, what are you going to do?

You're going to pull out the history and show them, look: at a price of $350,000 we only had one showing. When we dropped it down to $325,000 we had about three showings every week for two weeks but no offers. When we dropped the price down to $300,000 two weeks later, we had eleven groups through and five offers. The seller ended up choosing an offer from a buyer who offered $315,000, was fully approved for a loan and had enough cash reserves to buy the house for cash.

The point is this: Instead of under pricing a short sale property just to get an offer to the bank, you will be doing your job by getting the top dollar for the propety. The other advantage to this schematic is that the buyer who comes in super low may be doing this on fifteen other properties waiting for the first house to get approved. Then where are you with the bank? You don't have an offer any longer and it becomes an issue. 

I'd love to hear your opinion on this strategy for pricing short sales. Please leave me your comments below! Thanks~

Susan Manning, Real Estate Agent
License #01481594
Realty Executives of Temecula Valley
951-551-7790 cell
951-326-3100 x3155 office

www.eTemeculaRealEstate.com

Posted by

Susan Manning

Comments (11)

Ritu Desai 703-625-4949
Samson Properties - Chantilly, VA
Northern Virginia,Washington DC & Maryland Realtor

Your instructor is absolutely correct. I always like to price my short sale at market.

Apr 15, 2010 06:15 AM
Kathy Torline
ERA Herman Group Real Estate - Colorado Springs, CO
Colorado Springs Real Estate Blog 719-287-1049

Nothing easy at pricing short sales.   I think it also depends on how close the foreclosure date is, as more agressive pricing may help generate an offer to stop the sale date and give the lender time to review the short sale package.

Apr 15, 2010 09:04 AM
Susan Manning
Realty Executives - Temecula, CA

Kathy, if you're close to a Trustee's Sale, that's when you call your investors in to write an offer, any offer. 

Apr 15, 2010 11:56 AM
Satar Naghshineh
Satar - Amiri Property and Financial Services Corp. - Irvine, CA

Susan, the best way to do it is basically a hybrid approach. You list it like what you say, but you submit an offer below the low comps.

Here is a blog I wrote that discusses this topic and the logic behind it:

http://activerain.com/blogsview/1095292/-short-sales-make-it-your-highest-and-best-what-

This is a real life example of one of my listings in Temecula. On a 170k property, I almost made 15k in commissions and the buyer paid around 6k in deliquent HOA fees.

Just note, in California, you need to properly disclose to the buyer if you want them to pay your commissions. E-mail me if you need the disclosure we use.

 

 

Apr 15, 2010 05:36 PM
Susan Manning
Realty Executives - Temecula, CA

Satar, thank you for the inside scoop.  We were just talking about this yesterday!!  I really appreciate your input!

Apr 16, 2010 06:09 AM
Louanne Vargas
Austin, TX

I work for CDPE, we teach agents how to package a short sell, build a stong short sell business. I would love to get the information for you to look at.

LOUANNE VARGAS

512-870-8219

lvargas@cdpe.com

Dec 16, 2010 08:58 AM
Aida Pinto
Independent Real Estate Broker - Los Angeles, CA
Real Estate Broker (562) 884-6196

Under listing short sales doesn't work any more....how you doing Susan...I was away for a while doing what else...short sales...the can be a bit time consuming.

Jun 07, 2011 07:51 PM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

We have so few short sales and the state of Maine is 46th lowest for FSSR.

Jun 07, 2011 11:00 PM
Susan Manning
Realty Executives - Temecula, CA

You guys are lucky.  Our market is still at least 60% Short sales, 25% REOs.

Jun 08, 2011 10:42 AM
Gilbert Ramos
Integrity Mortgage Group - San Diego, CA

Hi Susan,

If youre going to be holding an open house this weekend let me know. Id be happy to drop off some nice color flyers that pertain to the sales price. Im a direct lender here in Temecula.

Jan 26, 2012 10:02 AM
James A. Browning
Browning Real Estate School/REO Institute - International, IT
MRE REOCertified(R) SSCertified

Thank you for sharing your blog; we need Real estate Professionals to share their comments and information regarding their markets and experiences. Thanks again from beautiful Colorado; Spring is here in the Rocky Mountains

Apr 26, 2012 05:26 PM