Short sale listing success...

As short sales have become more and more popular the question is, how do I get a short sale listing sold? And will the bank accept and offer at the listed price?

In our experience we have found that a lot of listing agents do not understand where to correctly price a short sale listing. They often price it so low as to be fishing for buyers, when in reality the lender will never accept an offer at the list price.

There are basically two components to the pricing strategy of short sales. The first, of course, is the comparative market analysis. As with any listing you want to be competitive with the current market place. But the second step is the crucial step. Pricing the home properly so that an offer will be accepted by the lender. We've found that the first lien holder will typically accept and offer whereby they net (after all closing costs and commissions) 80% or more of the loan value. If there is a second mortgage on the home, and if you are able to price the home competitively enough so that you're net proceeds are greater than 80% of the 1st loan value, all the better. The first lien holder will then negotiate with the second lien holder to close the deal. Often the second lien holder will only get a small percentage of their outstanding loan, but that's the risk they take by being second.

With these short sale pricing strategies put into effect we hope to see more short sale properties successfully closed, which in the end, will be best for everyone.