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Here's a Bad Way to Start a Northern Virginia Short Sale

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Real Estate Agent with Long and Foster Real Estate VA License # 0225089470

Here's a Bad Way to Start a Northern Virginia Short Sale

I was out for a listing appointment this afternoon with Sellers who happen to be in a positive equity position in their home.  Their home is in a neighborhood where I already have a Northern Virginia Short Sale listed and under contract.  When I ran the comps for the listing appointment, I knew I'd be dealing with a home in much better condition than the Short Sale I had listed.  Imagine my surprise when seeing the active listings I found a home listed for about 115% of market value for a home in average condition and read the following remarks:

House needs a little touch up paint and carpet is worn and stained in some areas.  The property is As-Is.  The dishwasher and washing machine aren't working.

Northern Virginia Short Sales are typically sold in As-Is condition.  However, as a Northern Virginia Short Sale Agent, I don't think I'd list a Short Sale in poor condition 115% above market value of what a home in average condition goes for.  That is definitely a bad way to start a Northern Virginia Short Sale.

Part of getting a Northern Virginia Short Sale sold is figuring out a list price that is not too high, or too low.  If it's too high, the Buyer's appraisal won't come in at value and the sale could fall out.  If it's too low, the bank will want more money and counter offer when their appraisal comes in, and that can chase off a Buyer who thought they were getting a great deal.

Pricing a Northern Virginia Short Sale properly is critical to the success of your Short Sale.  If you overprice for what you have, you may end up in Foreclosure before you ever see an offer...definitely not the objective of a Short Sale.

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Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Chris Ann - Pricing a home correctly is so important especially a short sale where the clock might be ticking.

Jun 22, 2011 11:11 AM
Cathy Criado
Criado Realty - San Antonio, TX
Making Real Estate Profitable

No, I wouldn't either.  Pricing is an art.  Condition is a no-brainer! To find a willing buyer you really need to be the best priced and best condition.  People have to want it, badly.

Jun 22, 2011 11:51 AM
Norma Toering Broker for Palos Verdes and Beach Cities
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes Luxury Homes in L.A.

Chris Ann - That would be defeating the whole purpose of a short sale, wouldn't it?

Jun 22, 2011 12:06 PM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Michelle:  When I saw that list price I thought, "Here's a Seller hoping to walk away with a chunk of change."  If it's short payoff, why over price?

Cathy:  Certainly no one is going to pay a premium for a home in poor condition when they could get a better one for less money.

Norma:  I think so.  I checked to see if maybe there was a bank dictating an unrealistic price.  Nope.,

Jun 22, 2011 12:35 PM
Cynthia Larsen
Cotati, CA
Independent Broker In Sonoma County, CA

Ugh. Is the listing agent showing the bank that she at least TRIED to get a higher than market price? Doesn't seem like a good game plan to me.

Jun 22, 2011 12:40 PM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Cynthia:  I wish I knew what the Listing Agent's thoughts are.  I have personally worked with Sellers who wanted desperately to get as much money as they could for the bank because they felt guility for being in the situation of a Short Sale, but once I explain the whole Buyer's Appraisal deal to them, they get realistic.

Jun 22, 2011 12:45 PM
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411

Getting the right balance in pricing can be tough and is an important reason for any seller, Short or normal, to go with an expert like you, Chris Ann.

Do you already have a post about the difference between North VA and So VA to which you can refer me?  I don't know the difference.   In CA, everyone in Nor Cal is above average in everything, everyone in the So Cal is below average in everything so it's easy to remember.  Hopefully, it's obvious to you that Silicon Valley is Nor Cal.

Is it possible the overpriced short sale List Price was dictated by the lender(s)?  Don't they sometimes pre-approve short sales under HAFA? or is it HAMP?  If it doesn't sell maybe they'll reduce their payoff demand?

Jun 22, 2011 01:52 PM
Elizabeth Weintraub Sacramento Broker
Elizabeth Anne Weintraub, Broker - Sacramento, CA
Put 40 years of experience to work for you

Every one of them is different. I have some priced higher than they should be because I know the buyers are gonna lowball 'em. A few others are priced lower than they should be because I knew I'd get multiple offers. Some are priced just right but for varying reasons will take a long time to sell. There isn't really any rule of thumb to use in my area.

Jun 22, 2011 03:24 PM
Belinda Spillman
Aspen Lane Real Estate Colorful Colorado - Aurora, CO
Colorado Living!

Chris,  It is hard to say if it was the agent or the homeowner.  We have had our share of unreasonable homeowners.  Of late, we have walked away from those listings wishing the owners good luck and good riddens.

Jun 22, 2011 04:04 PM
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Chris Ann ---- as we know there are some listing agents who will price a short sale far below market value as part of their marketing plan to attempt(or is that tempt) a buyer who truly believes they are going to get a fabulous price on a property that a bank(or number of banks and/or other lien holders) will never accept. What a terrible waste of time --- no wonder some buyers become so fed up with the short sale process.

Jun 22, 2011 11:49 PM
Melinda (Mel) Peterson
Grants Pass, OR - Bend, OR
The Savvy Broker - ABR, CRS

Great point Chris Ann... and terrific use of key words... smart lady!

Jun 23, 2011 06:18 AM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Lloyd:  I suppose it's possible, but I don't think even a bank would go that high.

Elizabeth:  Sounds like our market is a bit more predictable.

Belinda:  I would understand if the Seller stood to make money, but in a Short Sale?  Over pricing in that scenario makes no sense to me.

Michael:  It's true.  The success of a Short Sale starts with the Listing Agent.

Melinda:  Thanks!

Jun 23, 2011 06:29 AM
Tni LeBlanc, Realtor®, J.D.
Mint Properties, Lic. #01871795 - Santa Maria, CA
Tenacious Tni (805) 878-9879

Pricing correctly is so key to a short sale.  What I haven't liked about the HAFA program is the fact that it initially restricts the listing agent's ability to price a home correctly.  I guess I wouldn't mind if they actually priced it right -- but that's a whole different subject.

Jun 25, 2011 04:22 PM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

Tni:  Sounds like your experience with HAFA and mine are the same.  I find their prices to be a bit.....how shall I say?.......overreaching.

Jun 26, 2011 03:20 AM
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