Yep! It probably is. Until an offer is received, the short sale process between the homeowner and the lender(s) cannot begin. In other words, the seller & listing agent need an offer, any offer, before they can turn in the initial packet required to get the process started. You are likely being used; they just want your offer.
Let’s look at pricing. Firstly, agents and buyers know that short sales are a long shot regardless, so there must be a price incentive for the short sale to look better than the bank owned properties that can close in 30 days. With this in mind, if a short sale were to be priced at a fair market value it would likely never generate that first offer, if a short sale home were “priced to sell” it may get an offer, if a short sale home was priced at a ridiculously low price (it doesn’t matter if the bank would even consider it or not) then you are certain to generate atleast one offer to get the short sale process started and likely even multiple ones!
So if you see a short sale in your price range that looks too good to be true, remember that the listed price may be the equivalent of an Ebay minimum bid, and the reserve price (what the bank will accept -if they accept anything at all) may be closer to that fair market value price.
In most cases, unless you are an investor with time to kill, I’d skip the short sales and go straight for the foreclosures until the lenders on these short sales figure out a better system to get them moving faster. The short sale process really needs to work in reverse… determine the amount the lender(s) WILL accept and then (like on Ebay) post a “buy it now” price. We are seeing more pre-approved short sales as buyers pull their offers last minute once a bank accepts (usually because they have already found another home), allowing another buyer to jump in where the first one left off, but usually the new buyer wants even more off the pre-approved short sale price which typically starts the short sale review process all over again. It’s a short sale mess out there!
-Kristie McDonald
Tags: ebay, foreclosures, pricing, Short Sales