Short Sales – What to look For
I see it constantly; Listing Agents pricing their short sales way below market price, I'm talking sometimes $50,000 to $100,000 below market.This is a strategy used by Listing Agents to generate offers, in basic terms, should you price a San Diego condo or home at a ridiculously good deal you can generate more then just a few offers on the property.
You are able to bet your bottom dollar the banks haven't and won't agree to a purchase price so out of proportion. It's still the Wild West out there without any set standards or guidelines to pricing short sales. The Listing Agent must submit to the lender a document known as BPO Broker price opinion with comparable sales on the subject property, so , just how will they be reconciling the list price as well as actual market value?
There not
The Listing Agent job will be to sell a short sale as fast as they're able to, some Agents accomplish this by pricing the home extremely low , generate multiple offers after which submit a number offers to the bank and wait.
Exactly what are they waiting for?
The Bank Response, this is what everyone, Listing Agent, Seller, Buyer's Agent and the Buyers are waiting for (this could take 2-3 months or more). Generally the response is going to be more in line with the comparable sales then the price the Listing Agent came up with.
Once the official response comes in the Listing Agent uses that number to counter back either the one offer they choose to work with or all offers submitted Again, there are no set standards on who's or how many offers they will choose to work with for that "Best and Final Offer".
Usually the Buyer who comes in at the banks response or higher will make the deal.
The Bank response most times will still be an attractive price, if this weren't true why would anybody deal with a short sale in the first place?
So how should one proceed on a San Diego condo or home that has a price that seems too good to be true?
First, work with an experience San Diego Realtor, who has access to the comparable sales. Your Realtor can research the complex or neighborhood for recent sales on comparable property, decide on which, if any, were short sales or foreclosures and then come up with a reasonable price to offer. Depending on the home for sale, a Buyer has a much better chance at buying a short sale by making an informed offer to purchase then one who comes in at list price or lower.
I'm not saying that here is the rule; numerous Listing Agents will price their listings with a more sensible price in accordance with what other "like" properties have sold for. The important thing to this game would be to know which is which and act accordingly.
It's a Buyer's Market in San Diego, you can find deals to be had, take advantage of it!