I had this email conversation with a short-sale realtor who had listed a property for at least 10% under value last month, and marked it contingent immediately:
JtR: I’m curious about the price. With the reaction (she said she received a “bazillion” offers), it is obviously under value, and there are comps 10% higher. Why don’t you try to sell these for market value?
SSS: The short sale lender established the price – I am mandated by their program to advertise it, list it, amend my listing contract, etc at their approved list price, which is reflected as such. It is what it is – I am not doing anything I am not instructed to do by the powers that be….and who pays the agents’ commissions!
There is no reason to sell a property for more than a short sale lender requires unless the seller has tax implications – which they don’t. I am actually netting the lender $30,000 MORE than their required net proceeds believe it or not….So, the buyer gets a great deal – one of the few left out there…
JtR: No reasons? How about these:
1. The bank deserves full disclosure that their valuation is too low, and proper open bidding would attain a market-value sale. Don’t the investors deserve the truth?
2. The neighbors deserve a realistic comp.
3. Other buyers deserve a shot to compete.
I’m not blaming you personally, it is the system that is flawed. I’d love to see a short-sale agent address these reasons.
SSS: At the time the appraisal was completed, (months ago) – this was the fair market value of the property (maybe $20,000 low). There was no “full disclosure” needed – there was a full appraisal completed – not just a BPO. It’s not secret that the market has skyrocketed – but we had an open escrow and a legally binding contract when they issued their price.
The sellers chose the offer – not me.
I am not going to debate this with you to be honest; I don’t need to. I was instructed to do something by the two parties in charge – the short sale lender and the seller. And I did my job.
Have a good week…..
I dropped it after that, but the next question would have been – Did you disclose to the lender that you found a buyer, created a legally-binding contract, and opened escrow prior to putting the property on the MLS?