I see it all the time; Listing Agents pricing their short sales way below market value, I’m talking sometimes $50,000 to $100,000 below market. This is a strategy used by Listing Agents to generate offers, plain and simple, if you price a San Diego condo or home at a ridiculously low price you will generate more then just a few offers on the property.
You can bet your bottom dollar that the banks have not and will not agree to a purchase price so out of proportion. It’s still the Wild West out there with no set standards or guidelines to pricing short sales. The Listing Agent must submit to the bank a document called a BPO (Broker price opinion) with comparable sales on the subject property, so how are they reconciling the list price and the actual market value?
There not
The Listing Agent job is always to sell a short sale as quickly as they’re able to, some Agents accomplish this by pricing the house extremely low , generate multiple offers after which submit a number offers to the bank and wait.
Exactly what are they waiting for?
The financial institution Response, this is just what everyone, Listing Agent, Seller, Buyer’s Agent along with the Buyers are waiting for this may take 2-3 or more months. Usually the response is will be more in accordance with the comparable sales then the price the Listing Agent created.
Once the official response comes in the Listing Agent will use that number to counter back either the one offer they choose to work with or all offers submitted (Again, there are no set standards on who’s or how many offers they will choose to work with) for that “Best and Final Offer”.
Usually the Buyer who comes in at the banks response or more will make the deal.
The Bank response most times will still be an attractive price, if this weren’t true why would anybody deal with a short sale in the first place?
So , just how should one proceed on the San Diego condo or home which has a price that seems too good to be true?
First, work with an experience San Diego Realtor, who has access to the comparable sales. Your Realtor can research the complex or neighborhood for recent sales on comparable property, decide on which, if any, were short sales or foreclosures and then come up with a reasonable price to offer. Depending on the home for sale, a Buyer has a much better chance at buying a short sale by making an informed offer to purchase then one who comes in at list price or lower.
I am not saying that this is the rule; a lot of Listing Agents will price their listings at a more reasonable price in line with what other “like” properties have sold for. The key to this game is to know which is which and act accordingly.
It’s a Buyer’s Market in San Diego, there are deals to be had, take advantage of it!
