Ideally, we want home owners to stay in their home and one option is to try to get a loan modification. When that doesn't work, we are usually faced with a couple of other options. Foreclosure or Short Sale. Short Sale is the far better choice for everyone involved. Most people seem to understand this.
What I do not understand is why so many listing agents list short sales FAR below market value. I was just uploading a great EQUITY listing and as I was doing this, I noticed a brand new listing in the same neighborhood. It was almost twice as large for $100,000 LESS! It was a short sale.
I know the area and this particular home. I have not been inside but from what I can tell, buyers will be clamoring over it and it will most likely get bid up $150,000 or more than the list price. I am trying hard to understand the rationale here. Here are my questions/comments to the listing agents doing this.
1. This particular Fullerton Neighborhood is HOT! Buyers want to live in it! The first time home buyer credit is running out! This home doesn't need to be listed for $235,000 when buyers will pay $400,000 or more for the same house! It will easily appraise.
2. Do you ever want another listing in this neighborhood again? I just watched short sale transaction happen on the same street and out of 20 offers, the seller took the LOWEST so she could sell it to her neighbor. Therefore shorting the bank the additional $80,000 it could have received and further driving down the values. We are having enough trouble getting the appraised value. Why drive the neighborhood down more?
3. Buyers qualified for $235,000 really think they have a shot at this house!Is that why you are doing it; to attract $235,000 buyers? Or is it to get more leads for the lender you are requiring they qualify through? I am just wondering. These buyers are tiered, they are beat up and exhausted from going against 30 plus offers on a house they had NO SHOT AT!
4. You are making the local Realtors' jobs harder because we are continually have to try to explain why this home is listed at $235,000.I mean, they see it on the Internet at that price so that must mean they can get all that house for such a little price, right?
5. How do you think the bank would feel if they see that you are listing it for $150,000 less than it should be?
6. You are really hurting current sellers. This is the second time that this has happened to one of my sellers in the last month. Buyers see the lower listing and though it will not sell for that (unless of course it gets sold to a friend or neighbor) it hurts the other sellers!
I didn't even get into how this will affect YOUR seller. I have heard of sellers in tears because of short sales listed so far below market that it caused crowds of people outside. They were so overwhelmed!!!
These are serious points and questions that I really would like answers to so please comment. I am a Certified Distressed Property Expert (CDPE) and this is just not the way I do it. How I do it will be in a post to follow.
PS - Usually I am actually really nice but I am seeing this way of doing things just hurt way too many people! So, i fyou have the answers, I would really, really like to hear them. :o)
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Cristal Drake – Fullerton Realtor (R)...At Your Service for all your Fullerton area real estate needs! Prudential California Realty - 714-423-7525. DRE#: 01272061. All information in my blogs is believed to be accurate but is not guaranteed. Copyright 2009 all rights reserved.
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dance and visual programs at several locations throughout historic downtown Fullerton.
