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Saturday, June 05, 2010

Can a Short Sale Property Be Priced Too Low?

I read a couple of articles this morning on short sale listings being priced too low. Amazing the differing perspectives on the topic!

First of all, a short sale is a situation where the seller has a property on the market with the knowledge the purchase price will be less than the mortgage payoff.  As a result of this shortage the lender(s) will have the final approval of any offer the seller accepts. [Referred to frequently as third party approval]

One writer posed the question if pricing a short sale so low that it was pretty obvious a lender would not accept the offer was not false and deceptive advertising. I am no lawyer but he did make a good case.

The reality is:
in short sales the seller (the one with the name on the mortgage note) wants a contract!
But, does the lender want a contract at any price?  I doubt that is the case! Short sales are very often priced at a discount however the discount is not as great as with a foreclosure (bank owned) property.

The decision process in short sales is often a protracted process that takes as long as six months or more. Thus the buyer is rewarded, in my opinion, for their patience! 

So, can a short sale be priced too low? In my opinion, as a real estate agent representing the seller I say there is a price point where it is placing my client at a real disadvantage. My job is to get the best offer for my client and pursue lender approval.

For information on short sales (as a buyer or seller) in Brevard County Florida, call me at 321-693-3850 or email me, Gary L. Waters PLLC, Century 21 Baytree Realty, Rockledge, Florida.

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