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1. Who does the RE agent work for in a short sale? The bank or the current people in the house?
2. How is the price determined - What is owed on the house, What the going rate is in the neighborhood? We looked at a short sale and it was priced pretty much the same as the rest of the houses in the area - It didn't really seem like it was a special deal or anything. Why would someone buy that house and put up with the hassle of a short sale if the price isn't lower.
3. How much negotiating is there on a short sale.
4.We looked at a short sale and it kinda seemed like the homeowner had given up on upkeep. The house just kinda looked shabby. What is to prevent them from leaving a bunch of garbage (the basement was full of junk) or damaging the house once they leave.
Each lender has their own way to determine what they're willing to take on the house. They get their own appraisal and determine what percentage of the appraisal they're willing to accept, so it has nothing to do with what is owed on the house.
As for the upkeep, duh... most people needing a short sale can't afford their mortgage anymore and need out of the house before a foreclosure so how do you expect them to pay for the upkeep of their house? There is nothing preventing them from trashing the house. You can put verbiage in your contract to address that, but people facing foreclosure could really care less. What are you doing to do, sue them for money they don't have? So they know nothing can be done... it's just a risk you take buying a property like this, and hope you get honest sellers.
some short sellers will move early and leave the house empty figuring they have nothing more to lose . Sellers that actually care about the condition of the house they are losing are the exception. we did get lucky in the short sale we bought in that the sellers left the place in fabulous condition even though the house was being sold "as is".
1. Who does the RE agent work for in a short sale? The bank or the current people in the house?
As FalconheadWest said, Listing Agent works for the seller (current owner) and negotiates with the bank on behalf of the seller.
2. How is the price determined - What is owed on the house, What the going rate is in the neighborhood? We looked at a short sale and it was priced pretty much the same as the rest of the houses in the area - It didn't really seem like it was a special deal or anything. Why would someone buy that house and put up with the hassle of a short sale if the price isn't lower.
Again, good explanation from FalconheadWest. I'll add that the listing price is usually set by the seller and not the bank. Their price may or may not be accepted by the bank depending on the bank's value analysis. You should offer what you think is a fair value based on comparable sold sales, and what you think the bank may willing to discount.
3. How much negotiating is there on a short sale.
You first have to negotiate a price with the seller as you would with any home, then see if the bank will approve. If your offering price is not acceptable to the bank, the bank will likely come back with a price they will accept, assuming they will approve a short sale at all.
4.We looked at a short sale and it kinda seemed like the homeowner had given up on upkeep. The house just kinda looked shabby. What is to prevent them from leaving a bunch of garbage (the basement was full of junk) or damaging the house once they leave.
Nothing in reality. The purchase contract should have a requirement that they maintain the house in similar condition as when offer accepted, and remove all personal items. You should walk through the home prior to closing to insure it is in the condition you expected.
Even on a short sale, the buyer and his agent still has a final walkthrough. If things seriously seem amiss compared to the original showing, that can be an issue. The 'as-is' in the contract only covers the seller's lender. It's their way of telling you not to expect any repairs or warranties from the seller's bank at closing or after closing.
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