Are you experiencing other brokers pricing REO lowering than bank advises them?

Question for other brokers....Are you experiencing other brokers pricing REO lowering than bank advises them? There needs to be some industry standards put in place to protect buyers from this issue....
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March 27 2011 - Tigard
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Answers (11)

This happens in my market constantly and it is a nightmare. Brokers take a short sale or REO listing with NO INTENTION of selling it. They reduce the price of the home to the point where every buyer in town gets the phone ringing. Then they just do not answer the phone when buyer brokers call. The property usually sits and sits and sits because after it expires and a new broker lists it the buyers in the market place are not interested in paying a higher price for it now then the price it was listed at with the old dishonest broker. Now when this happens over and over in multiple neighborhoods it is a major contributor in the devaluation of property values in the entire area. 

This market will turn around when there are changes made to the appraisal process and when we are through all the short sales and foreclosures. 
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January 24 2012
I am not aware of this happening in Louisville, Ky.
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January 21 2012
Thumbs up to Carole Tyne from AZ!   Absolutely correct!!

....and I'm not just saying that Carole because we met last November at the National Association of Realtors Convention, I'm saying it because Carole summed it up perfectly!!

How are YA Carole??

Have a GREAT 2012!
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January 01 2012

The question states REO.   Not sure how that would be possible listing under what the AM requests.  The listing agent on the REO can only list for what the AM tells them to.   Like Jeff stated REO listing agents are contracted in the listing agreement what to list it at.   We as REO listing agents must provide copies of the MLS sheets showing the listing and all the information entered.  If it is low it is because the AM is listing it low to get multi offers.  Frustrating for those who have clients who get all excited to think they can get such a wonderful property for such a price.   Only to be out bid.  Good business for the AM per they get offers right away for the end price they were looking for or better.  

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May 28 2011
I don't know how they are getting by listing them for a price below what is on the listing agreement.  We have to provide copies of the MLS sheet to our asset managers and they monitor all the content we are advertising.
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May 21 2011
I've never seen a Broker list a REO or any property for that matter at a price different then whats on the listing Agreement signed by both parties. The seller in your question would be the Lender correct? If the Seller is a property owner in preforeclosure then it's a short sale not an REO.

The practice of listing short sales for well under fair market value is a disservice to the seller first and foremost. The seller has relied on the agents advice as a professional as to price and terms in the listing agreement. This may also fall under the ethics guidelines if the agent is a "Realtor', review the code of ethics about advertising to the public, dealing fairly and honestly.

Many agents are simply using the listing to generate buyer leads, however there are cases where the lender is requiring the property owner to list the property for 3-6 months before granting a deed-in-lieu. In that case there is no motivation for the seller and the listing agent simply uses the property to generate leads.

The best protection a buyer can have is to work with an experienced agent who will guide them through the various situations of the REO and Short Sale market.

 
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May 02 2011
Assuming you meant short sale, since REO pricing comes directly from the asset manager.  Most banks won't advise a listing agent on what an acceptable price is for a property based upon the BPO, and in some cases the bank is way over priced because they have only done a desktop BPO.  Some buyers tend to shy away from short sales due to the amount of time they can take there for expect a better deal.   
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March 27 2011
REO! Read it wrong. Was thinking short sales. Duh.

How the heck are brokers listing REO's for less than what the asset manager has specified?

I guess there will be some REO work in my future!
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March 27 2011
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I have seen that type of shadow pricing in my market. It is frustrating as a buyer because it feels like a manipulation when you find out the whole story. A little like an "approved" short sale that isn't actually signed by the bank yet.

I completely agree that the RE boards need to take a stand. They are the only ones who can stop this practice. I hope they do.
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March 27 2011
Lol... The Bank does not advise the Broker, but the reverse. And we list REO's at the price we're given by the Banks. Banks take usually 2-3 BPO's regarding a property and then determine the listing price based upon those figures.
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March 27 2011
The presumption is the broker has made contact with the bank and / or the bank has told them the bottom threshold price.

Some banks don't want to be bothered until the sellers have an offer in hand.

Some brokers don't 'bother' with asking the bank the threshold price until they've gotten an offer - and wasted everyones' time.
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March 27 2011
 
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