Highland Park CA homes for sale - Short Sales
My number one pet peeve when dealing with short sales...I mean this drives me nuts...I mean I'm pulling my hair out over this....my number one pet peeve when dealing with short sales is....
First of all...what is a short sale?
"I want to buy a Highland Park home...but it's a short sale...what the heck is a short sale?"
Highland Park CA homes for sale - Short Sales
A seller wants or needs to sale their home....but...because of tough economic conditions...and home values dropping...(or seller using their home as an ATM)...the home is now worth less than what is owed to the bank...so seller must sale short of what is owed to the bank...hence the term...short sale...or short pay...
Back to my number one pet peeve when dealing with short sales is....drum roll please....the answer is coming...more wasted time...the answer is...my number one pet peeve when dealing with short sales is...
1. Listing agents pricing the home incredibly, unreasonably, ridiculously low...
Why do agents do this?
Highland Park CA homes for sale - Short Sales
Let me think...hmmm...why would they do this...to help the buyer?...to help the seller?...to help the bank?...
Here's the scenario I see way to often..."123 Parkway Place - Best price in town, will go fast, 3 bedroom 2 bath 1500 sq. ft. of luxurious living space sitting atop a 7500 sq. ft. finely manicured lot....only $325,000...."
Wait a minute, I know that area...the comparable homes in that area, with similar sq. ftg. are going for $425,000 to $475,000...what's up with this...??? and I read on...and glance over the agent remarks to see...short sale subject to lender approval...ah ha...so that's the hook...
Then suddenly...my cell phone is ringing off the hook!!!!!!! It's my best buyer...my super qualified...ready to go...easy to get a long with...Mr. Perfect buyer I wish I could clone person!! Who is so ready to buy a home in Highland Park he can taste it...yes taste it...yes, he can actually taste Highland Park CA.
"That Highland Park CA home for sale...at 123 Parkway Place...I saw it on Redfin... it's going for $325,000...that is so my price range now...I know I told you I could go up to the $500's and yes I am pre-approved up to that amount, but this is $325,000 and has everything I want...what a bargain...I have to write an offer on this one...right away...I'll be at your office in 5 minutes"
Highland Park CA homes for sale - Short Sales
What am I to do...Mr. Perfect buyer guy didn't even give me the chance to explain this a short sale and that....
Why do listing agents do this? They know the comparable homes in the area are X. Why are they listing at Y. To get multiple offers thus possibly a better price...sure...to get an offer quickly, shoot it over to the bank, stave off the foreclosure...possibly...but who are they helping...most times know one...
Is quicker better..??? Why am I saying this..."what's wrong with this scenario Mr. Realtor Guy...what makes you so darn smart...you card carrying...DRE loving...Mr. I know everything guy...I told you I'm willing to go $20,000 over asking"
"I'll tell you what's wrong Mr. Perfect Buyer who has now transformed into a complete jerk right in front of my eyes and lost several IQ points in the last five minutes, guy..."
I'll tell you what's wrong with this scenario...the price was not a real price so it didn't garner a real offer so the deal is not going to happen.
When the banks loss mitigation negotiator begins looking at this home seriously for approval they will order a BPO (Brokers Price Opinion) usually another Realtor...to appraise the property and give their opinion of what the home is worth...a third party who has no vested interest in the transaction is paid a small fee to give his/her opinion of the homes current market value....looking at all mitigating factors...comparable homes, location, condition of home, etc....
"Well Mr. Perfect Buyer guy who now hates me because the short sale didn't get approved and now he's found another Realtor to work with because I wasn't able to close the deal when he offered $20,000 over asking...."
The BPO came in at $425,000...the lower end of the comparable homes but still far from the over asking offer of $345,000...everybody loses...buyer backs out because he's not going to bring in more money to make up the difference between offer and BPO...the seller loses because they are now back at square one...no buyer and foreclosure lurking...bank loses because they have another non-producing loan sitting on the market wasting away...
End of story!! What is the moral of the story? Listing agents price you short sale listings correctly!!
Buyers if the deal looks too good to be true...it is ...too good to be true!! Don't be fooled by false pricing!!
Highland Park CA homes for sale - Short Sales
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Highland Park CA Short Sales
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