Short sales. Love'm or hate'm they are here for a while. At least till the market picks up, inventories deplete or the economy starts to recover.
Subject to approval, short sales allow seller to complete a sale and possibly avoid foreclosure, a buyer to purchase at a discounted price in some cases and the bank to recover the vast majority of the debt against the home.
But what happens when the list price is ridiculously below fair market value?
We are seeing an increase in listings that are so far below any persons reasonable expectation it's bordering on fraudulent. Definitely misleading and certainly un-ethical.
Example: Home is assessed for $168,600. Sold in 2007 for $188,800. Now it's listed for $50,000. Any red flags there? Should be.
Food For Thought;
1) Although banks will accept "a" loss, most banks will likely NOT accept that amount of loss. They would be better served foreclosing and re-selling the property for fair market value.
2) Sellers are deceived. They are relying on the advice of the listing agent to provide professional accurate information when choosing a list price. This can waste a sellers valuable time and much needed resources in hopes of closing that will most likely never happen.
3) Buyers are deceived. Wasting their time and money and are disappointed when the sale fails, the bank declines the transaction or makes a counter offer much higher than the listed price.
4) Buyers agents also waste time, energy, and money working to close a transaction that never had a chance and risk losing that buyer out of frustration.
5) These legitimate buyers are siphoned away from listings that actually have a chance to close and further exacerbate the current housing problems.
What to do?
If you lack "Short Sale" experience speak with your Broker. Check the last recorded documents to help determine what the liens are against the property. Compare, the last sale price, the time lapse from the last sale, the market conditions since the last sale and of course the "list price". If it's unrealistically listed report it to your local MLS as a potential rule violation and run like the wind.
Do not risk losing your good qualified buyer to unethical and potentially illegal practices.
Comments (2)Subscribe to CommentsComment