Teaser Prices on Short Sales in Lake Nona, Florida. False Advertising?
It may not come to the surprise of homebuyers in Lake Nona and Central Florida that the price listed in the MLS for Short Sales is not, by any means, the price that will be used to consummate a deal between the buyer, seller and the seller's lender. As crazy as it sounds, in most cases this price is well below the price that the lender will actually accept. I hear it all the time from buyers "Isn't the price listed in MLS the price needed to seal the deal between the buyer and seller?" "Isn't it false advertising to promote a property at a price less than what the seller needs to close?" "Are teaser prices ethical?"
While many savvy buyers know the basic ideas of how traditional real estate transactions (equity sales) play-out, short sales seem to break all of those rules and are a continuing myriad of constantly changing practices. Listing agents, whose duty lies with doing the right thing by the seller, are confronted with double-edge-sword type decisions that are being dictated by lenders, mortgage insurance companies and home owner associations. Lenders, who are said to be taking a "short" in the difference between what is owed and what the property is worth, are not as accommodating with accepting this loss as some might believe. Mortgage insurance companies have their hand out for whatever they can get and HOAs are currently getting paid all past due payments at the closing table, including late and legal fees. The longer that the payments to these entities are withheld, the larger the price tag will have to be to pay off the liens. In Lake Nona, this could be as much as 12% above list price. How will you know if you are paying too much? Contact a realtor who services Lake Nona and have a market analysis done before you buy.
So, why don't agents do the math and figure out what it will cost to pay off these organizations and list the property accordingly? Most do, or they have a title or facilitating company do the numbers, but they are also fighting the foreclosure time-bomb. If a seller goes to a foreclosure court hearing without being armed with a contract for sale and purchase on the property, they risk the judge ruling against having more time to do the short sale and the property marches closer to the fatal foreclosure sale. The big object of a short sale is to avoid foreclosure. So, no shocker why real estate is being marketed at teaser or false prices to get buyers to write offers quickly. The listing agents have an ethical responsibility to their seller to do what is legal and sufficient to get the job done by getting that house under contract and avoiding foreclosure in Lake Nona, FL.
Please feel free to get in touch. I am a licensed real estate agent in Lake Nona, FL
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