Essentially, a short sale is the bank allowing a house, it holds the note on, to be sold for less than the loan amount. The bank agrees to this transaction, because it believes there will be less expenses than going through the foreclosure process and taking ownership of the home. They can be complicated and frustrating.
Some agents have been advertising their short sale listings artificially low to entice offers. It’s the ultimate “bait and switch” and I wish our Board of Realtors would do something about the problem. A few weeks ago, my client essentially made a full price offer on a home that was rejected by the bank. I walked away feeling the whole ordeal was a waste of time and felt sorry that my client had gotten her hopes up. I think an agent should disclose the home’s potential short sale status, but shouldn’t set the list price for less than the loan amount without proper assurances.
Here is a great article by the Phoenix Real Estate Guy, which addresses this issue:
There are agents out there that list short sales at ridiculously low prices. Some of this may be due to ignorance, some may be agents trying to generate an offer and/or bidding war. Any list price on a short sale needs to be taken with a grain of salt. If it sounds too good to be true, it is. While banks often pull bone headed moves, they aren’t completely stupid and they aren’t going to approve a short sale significantly under market value…
If you’re interested in finding short sale homes in Atlanta, and have a lot of patience, please feel free to call me, I’d be happy to discuss the pros and cons with you.
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