Short Sales are NOT your best purchase deals

Real Estate Agent with Pacific Sotheby's International Realty 01711873

$1,000,000 dollar ocean front home, short sale, now only $489,000 - wow. 17 offers in the first 3 days....

Sound too good to be try? IT IS.

The bank is owed $ 925,000 and they are not going to take anything less than $ 865,000.

If you are a seasoned buyer's agent, or educated client, you will realize that this falls into the 'too good to be true category' HOWEVER....there are deals on the horizon.

Once the property reverts back to the bank, and 80% of these will. After the borrower is no longer on the hook for being responsible for a loan to pay back the bank a percentage of the deficiency balance, and now that all of the consumer protection law concerns are worries of the past, the real deal making begins.

BANK OWNED - GREEN LIGHTS TO GO....although the banks might play hard ball early on in the process, the bottom line is they are not in the real estate business, and it is only a matter of time until one of the bank execs makes the call to clean out the balance sheet, and move the properties.

If you are a highly skilled buyer's agent, you can secure a great price for your client, if you are consumer, going after the property directly with the bank, and you do not have the skill-set of successfully securing bank owned properties in the past, the best advice I can give you is 'secure a buyer's agent immediately, you pay not commission on listed properties, and you are almost guaranteed to secure the property at a better price, and have the due diligence process meticulously managed.

We recently secured a 1.7 mil property for a high level executive for 1.1 mil. We saved 600k on the purchase, saved him probably $50k of his time, $5k in travel, and he did not have to learn a new trade along the way. Although this circumstance may not be typical result, this is the kind of value a seasoned buyer's agent can bring to the table.

A trusted professional in their specific is your best resource.

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Vickie Nagy
Coldwell Banker Residential Real Estate - Palm Springs, CA
Vickie Jean the Palm Springs Condo Queen

Yup. Banks want market value. There are many properties on the MLS that are offered for less than the bank will possibly accept. Too bad there aren't MLS rules governing that!

Aug 18, 2010 06:44 PM #1
Todd & Devona Garrigus
Garrigus Real Estate - Beaumont, CA
Broker / REALTORS®

Short sale scams are everywhere these days, but out in our area if you're looking to purchase short sales make up about 70-80% of the market!

Aug 18, 2010 06:45 PM #2
Brittany Stewart
Luxe Realty Group - Plano, TX
Making Dallas Home


I agree.  Agents in our area are beginning to way underprice short sales to get multiple offers..not the smartest thing!  I agree REO's are to the point and the banks want them GONE.

Aug 18, 2010 06:49 PM #3
Sandy Wagner
RE/MAX Professionals 253.225.8322 - Gig Harbor, WA
Short Sale Specialist Tacoma, WA, and Gig Harbor,

Vickie, It's really hard to govern that when those of us doing short sales have no idea what the bank will or won't take until we get a Purchase and Sale. I have 95% of mine go through selling them below market value because people just will not even start to look at a home until it is priced below assessed value. I always start above and lower the price according to activity. We are in a time crunch to get an offer before a trustee sale because the banks won't extend those until we have an offer.

Aug 18, 2010 06:51 PM #4
Jim Paulson
Progressive Realty (Boise Idaho) - Boise, ID

As much as I hate short sales, they do have a potential time and place to be acquired, but via investors, not homeowners!  Typical homeowners can not wait four months to find out if they are buying a primary residence or not.  Investors, that only care about getting a "deal" can throw 100 offers out there and wait for the right opportunities to acquire 5 or 10 of them.

Serious buyers need to look at list to sales price ratios and market pricing to determine what to do.  For example, in the Boise, Idaho area, I know that REO properties priced under $200K will probably be listed under market price and will have multiple offers so that they will sell in the first week for over list price after a bidding war is created.  I know 100% of REO properties will sell and ultimately close and yet only 40 - 60 percent of short sales will!

Now more than ever, you need to negotiate your contracts as if you were playing Chess by figuring out what future moves your opponent may be thinking and planning your strategy accordingly!

Aug 18, 2010 07:42 PM #5
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Jay Becker

Serving my client's best interests for 25+ years
Great Homes to purchase in San Diego