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i am a bit confused about short sales.... a few are listed on the mls... is the listing price what the bank has told the seller that they will take as a minimum or is it to try to start a bidding war... i have a feeling that even looking at these short sales is a waste of time.... i want to see the house, put the offer in, and find out in a reasonable amount of time... not months later... i was automatically emailed 2 homes on friday nt, contacted my realtor who sent me pics on saturday.. wanted to make an offer, he couldnt get ahold of the listing agent on sunday, and when he did, the agent told him offers were accepted on sunday... man thats quick...
Only a few percentage of shorts are sold. Most are foreclosed. Getting a little better but still no place near 10%.
Normally the initial price is set by the seller in consultation with their agent. The bank has no role until an offer exists. Then the bank says yea or nay or counters.
None of this is particularly legal or makes a lot of sense but that is how it works.
Once the owner has an offer he can do one of two things...generally dictated by the agent. He can accept the offer and forward to the bank...or he can simply forward the offer to the bank. He does not have to sign the offer to forward it.
If he does sign it the MLS will mark the listing as contingent - Short sale approval. If he does not sign the listing remains ER and others can continue to make offers against that status. Normally the agent will tell you how many offers there are. Gets up to 15 or 20 on some.
If the seller sign the offer however it is now contingent. You can however make offers against a contingent listing as well. What the seller does with them is another story. A smart seller forwards them all to the lender to pick one but who knows? If I were selling I might even hold the additional offers hostage. "Hey I got a good one 10K higher. Give me a little priority and I will forward it to you" Might work if you can get someones attention. Note that the agent has no duty to the lender...and in fact can aid and abet the seller in socking it to the bank.
NOte also the agents and lenders fight about the commission. The seller is actually on the hook for the commission but pretty much has no money. So if the lender says 5% what does the agent do?
NOte that after the first pass the lender will often agree to a figure. That does not however mean the figure is hard. Just that you know the lender will go for that sum. The lender however may also go for less.
They are overall a pain. But sometimes some sweet deals.
All I want to add to olecapt's usual wisdom is that I've learned, as a potential buyer myself, is to use these following sites to help me out, LV's interactive mapper in conjunction with Clark County's Assessor's page. Here's the way it clicked for me after two offers falling apart; if owner #1 is trying to sell property X for a crazy amount below what they paid, your offer will be rejected by the bank. A good way to avoid this is to use those two sites and determine what the original purchase price was. If it's way below listing price, don't waste your time. If banks were rational they wouldn't be in this situation in the first place. Never mind that there's 4 properties in foreclosure in the exact same complex, the bank doesn't care. Do not expect logic to win in this situation, even though this is a purely numbers game.
Good luck and don't buy my dream house, I'm still in the market, too.
According to the the LV realtors, 52.3% of March 2008 sales are distress sales-----foreclosures, or short sales. This should "thin the herd" of real estate professionals, as they are not qualified, or licensed to provide consultation in the associated legal ramifications.
All I want to add to olecapt's usual wisdom is that I've learned, as a potential buyer myself, is to use these following sites to help me out, LV's interactive mapper in conjunction with Clark County's Assessor's page. Here's the way it clicked for me after two offers falling apart; if owner #1 is trying to sell property X for a crazy amount below what they paid, your offer will be rejected by the bank. A good way to avoid this is to use those two sites and determine what the original purchase price was. If it's way below listing price, don't waste your time. If banks were rational they wouldn't be in this situation in the first place. Never mind that there's 4 properties in foreclosure in the exact same complex, the bank doesn't care. Do not expect logic to win in this situation, even though this is a purely numbers game.
Good luck and don't buy my dream house, I'm still in the market, too.
Note that this is simply the comp game. You need to know what distressed prices are in the neighborhood. Very complex and unlikely to yield well if there are none. Note that a short is very different than a REPO. It is triangular. The lender is trying to extract maximum money from the seller while seeing that the property sells at a reasonable price. It is often the negotiation between the seller and the lender that screws the deal. The actual offer has little to do with it.
Listing prices are not very relevant. Your offer needs to be that of distressed comps. Nothing wrong with offering well over or under list if that fits the comps. If that offer is well below the list though you likely won't get past the seller. In that case you will probably do better to wait a while...sanity or foreclosure eventually occurs.
According to the the LV realtors, 52.3% of March 2008 sales are distress sales-----foreclosures, or short sales. This should "thin the herd" of real estate professionals, as they are not qualified, or licensed to provide consultation in the associated legal ramifications.
And well over 50% of the present sales are REO/REPOs. These are virtually identical to a normal sale. Only difference is making sure the buyer knows the deal is "as is-where is".
Practicallly the only difficulty is convincing buyers that the lenders are not going to take an offer that is 20% below a list that is already 20% below the comps. And that if well priced there may well be 10 or 20 offers.
Shorts are more complicated. Very small part of the market however.
And well over 50% of the present sales are REO/REPOs. These are virtually identical to a normal sale. Only difference is making sure the buyer knows the deal is "as is-where is".
Practicallly the only difficulty is convincing buyers that the lenders are not going to take an offer that is 20% below a list that is already 20% below the comps. And that if well priced there may well be 10 or 20 offers.
Shorts are more complicated. Very small part of the market however.
Your response is exactly why any potential buyer should obtain LEGAL counsel on this matter. In a short sale, the lender is in NO way bound by any contract between buyer and seller. Please folks, seek professional help, rather than a realtor.
Your response is exactly why any potential buyer should obtain LEGAL counsel on this matter. In a short sale, the lender is in NO way bound by any contract between buyer and seller. Please folks, seek professional help, rather than a realtor.
The problems in a short sale in no way deal with the actual sale. They deal with the negotiation. In the difficult part of a short sale a lawyer is right up there with the **** on a bull.
The problem with the short however is the Realtor does not have a lot of leverage either...no one does.. It is a time when all run in circles to no apparent purpose. The question is whether you want the runner paid by a seller commission only at a successful end or your $150 an hour for the hours spent running.
When a short sale is successfully negotiatied it turns into a REPO type sale. The old "caveat emptor" is the only guiding principle.
Any time in an RE arrangement...particularly those with builders or FSBOs or RE Agents...that one feels uncomfortable an RE Lawyer is in order. For a few hundred dollars they will advise you whether there is a problem. Then you hire them or walk or whatever.
Sheriff understands little of this...but likes to get his oar in.
So more then 50% of sales are repos, foreclosures and shorts. YIKES !
I think I read last month there were something like 1745 sales.
Olecapt you also just said some of these are getting 15-20 offers. Are these real live buyers or just sharks with money feeding on deals? But are they deals? We all know how over priced we were so is the market just finding the correct value?
Lastly....all of these 22,000+ sellers out there....are also buyers when theirs sells. What the hell is it going to take to start the engine? I bet a large % of these sellers are getting the hell outta here but there are still plenty of people coming in. Since there are so many home exchanges with out of state buyers and sellers is this complicating things?
I think I also read that 60 something % of all listed homes are vacant. Are they all investors gone bad?
When I get called to some of these investor homes another thing I see is the investors bought these homes stripped with no upgrades. This brings down the value of the neighbors who bought the house to live in and bought upgrades. And even if there is just one buyer who wants to live in Oak Grove for example, they will buy the house with all the upgrades. And the stripped down investor foreclosed on home still sits. To be used as nothing more then a comp tool or a comparison tool for buyers.
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