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Exposing Short Sales
There has been a conspiracy for years that Walmart will offer the lowest prices and when everyone else is out of business they will raise prices since we will have to use their services. I am not convinced of this argument, but their is a similar issue taking place in the housing industry.
How would you feel if you awoke tomorrow morning to find that the house that you are competing with in re-sale has dropped their price 70k below yours and is selling it as a short sale? Nothing new, so after a few curse words and frustration you decide to drop your price 40k lower and so do 3 other surrounding homes.
You wonder why people keep visiting your home but no one is putting in an offer. You begin to feel that the sky really is falling and that it is the Presidents fault.
QUESTION 1# How would you feel if you found out that the short sale that caused everyone else to lower their price had a low dummy price to get offers and that the bank wasn’t willing to accept it in the first place?
The seller no longer cares. The seller just wants out and isn’t making any money on the listing any way. They are just trying to save their credit a few points compared to a foreclosure.
QUESTION 2# How would you feel if you found out that the reason you aren’t getting any offers is because there are 6 contracts that are pending on the short sale and have been frozen while waiting 5 weeks for the bank to respond?
There really are people buying at this time. There is a good chance that you aren’t getting an offer because buyers already have contracts on other homes so they are FROZEN. They can’t put out multiple offers. They are also afraid to pull out from the short sale because their lucky side tells them that they could get a steel.
Believe it or not, we are paying a steep price for these types of transactions. Short sales are not bad on their own. Nor are all Short Sales listed at fake prices. But prices that a bank has not approved are detrimental to our market. It hurts neighborhood values which cause more foreclosures and short sales which ties up the only people that can help fix the issue: BUYERS (not government).
Our Century 21 Redwood Realty office is currently working with our local MLS board and NVAR to address these issues. Wouldn’t it be much better if the financial institution had already approved the listing price BEFORE it was advertised? The complaint will be that the bank doesn’t respond quickly enough to approve a price. Sorry…. It is not fair that buyers are being deceived and restricted because banks are slow and backed up.
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Having worked on several successful short sales, I disagree with your advice not to consider short sales. If you know up front what you're getting into, you can get a great deal. It's not for everyone, but there are buyers who can and should take advantage of these.
Posted by B_Julie_Emery
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