Are Short Sale Prices Affecting Your Home's Perceived Value?

In this economy short sales have become as popular, if not more so than foreclosures. But one trend that seems to be hindering the home sale process is the pricing of a short sale. Just becuase a house has a price posted on the Multiple listing service and the internet does not necessarily mean that the bank is going to accept that number or price.

A common perception among home buyers when they start viewing properties online is that the asking price is close to what the bank will accept for that house in a short sale. The longer it stays on the market the increase in likelihood they will accept less also plays into account.

However; that is not alwys the case. In fact, most times the asking price may be even less than an acceptable number the bank will accept on the house. Unless I see approved short sale...price set by bank or some variation letting me know that the bank informed the listing agent this is the acceptable price they are willing to accept; I do not know for sure if they will accept that number or not.

When we list short sales on the market we are basing it on what we beleive the bank will accept. If a time passes and we are not getting any showings or offers we will lower the price accordingly. Our responsbilty as a listing agent is for our sellers. We are trying to get thier home sold to avoid the foreclosure. And we keep lowering the price until we solicit an offer on the house. Then we present the offer to the bank and they tell us yes or no. If they say no; they will counter back with their bottom line acceptable offer on the house. Then we tend to adjust the sale price to that number if the buyer elects not to accept that price.

But, when people are looking to buy a home or sell a home these perceived values affect the pricing of the homes in the neghborhood. A perfect case is 2 homes next door to one another that I just went through this with. One, a short sale and the other a resale. The short sale was priced $30,000 less than the resale. However; the bank came back at $18,000 HIGHER than the price the listing agent had it listed for. The buyer apparently walked away from that offer and the listing agent adjusted the price accordng to what the bank would accept. That put it inline with the other house. But the other house was not getting any showings or offers on it until the other agent increased their sale price to reflect what the bank would accept for the house. That process can take months before the bank responds back. It ths affects the seller trying to sell their house and the potential buyers who think that the house is substantially over priced (but really s not).

The point here is that when you are looking to buy a home or sell a home; you need to factor in what is selling or sold in your neighborhood. That s a gauge of how the market is trending. Be careful of homes on the market that are listed as short sales that are not priced by the bank. Becuase as the od adage goes "if it is to good to be true it probably is".

Dave diCecco
Realtor/Broker
www.davedicecco.com