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How does a short sale work. Who decides the selling price?

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September 05 2012 - Jacksonville
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Ultimately the lender, or the lenders if more than one lien. If you are considering a short sale, you should make the decision and contact a Realtor soon. December 31, 2012 the Debt Forgiveness Act expires and at this time there has not been any legislation to extend it again. What this means is that you may be liable to the IRS and be charged income tax on the amount the bank deems deficient. Even if the short sale approval says you don't owe the bank anything, you will still be required to report that amount as income, and may be charged taxes if it doesn't close before December 31st, 2012. Hope this helps....

I am here in Jacksonville and would be happy to help you if you would like.
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September 06 2012
Hello, Normally, the Real Estate Agent look at CMA reports and help you decide the best price for your house.  The bank has to approve the amount based on an appraisal.   

I hope this was helpful.  Let me know if I can assist you more!
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September 05 2012
Common sense would say the Bank would set the ultimate price because it is they that will decide if they will accept it but that is not the case. In the past I have arrived at a price by doing comps for the home owner.  I had a deal on a house I priced at $299,000, offer to purchase at $220,000, submitted to bank who sat on it for months without a yes or no. Another offer came in at $282,000 when the other was expiring. Submitted the better offer and the bank sat on it. After nearly a year of dealing wiht bank of America 2 weeks before closing the bank forclosed on the property and since has given the property a value of $225,000. 
  Try to price your property accordingly and good luck  
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September 05 2012
You and your real estate agent will look at the homes that have sold and establish a selling value for your home that is fair to the buyer. When you accept an offer - the bank will also do a value report (BPO or Appraisal) on your home to decide if they want to forgive you the difference between what you owe them and how much they will net from the sale of your home.
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September 05 2012
Depending on who your mortgage is with , their are different propgrams. a cooperative short sale for instance if you start early, the bank will set a listing price. But typically the agent sets the price. It is best to list the proeprty at market value in it's current condition. it is not a benefit to the seller or the buyer to have teh price set artificially low to see what they will take. This wastes everyone's time. Remember the the seller(borrower) is  distressed, that does nor mean the home is.The price can be reduced if the home has major concerns, needs a roof, etc. If you are interviewign agents make sure they have sold ( on the listing side if you are the seller) at least 10 short sale properties in the last 12 months. but then once teh home is listed, a buyer makes an offer you are under contract. The contract and complete short sale package goes to the lienholder(s). The 1st mortgage is responsible for payment of closing costs, commissions, back HOA's etc. Each bank has their own set of guidelines and some fees may be reduced. A bank can also ask for a cash contribution in some cases. Most banks have a history of doing certain things. Anyway, once the package is in, the bank will order a BPO( Broker Price Opinion) or appraisal on the property to determine a fair market value. From this number is where the bank derives all prices and costs and they will accept or counter the offered price. the whole process can be 30 days-6 months depending on the bank. Again certain banks are known for taking a long time. once you have a written approval letter, the buyer can start their financing , do inspection , and close! there can always be hiccups along the way so having an experienced agent on your side to guide you ( buyer or seller) will always be helpful.
So I hope this was helpful to you.  
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September 05 2012
Hello!  As with most answers... it depends!   You and your Realtor will likely submit an offer based on the current comparable home sales in the immediate area... regardless of the 'asking price'.    The individual Seller really has no authority to accept your price or not; however, if they feel it is a strong offer they will submit it to their mortgage servicer for consideration of a short sale.   Within the short sale process, the bank will determine their opinion of value based on recent real estate activity in the area and present that to the investor behind the note... and in some cases to the Mortgage Insurance Company (if applicable) who will then determine whether your offer is within their calculated range of acceptability.  Hope this answers your question!    Best of luck!   Angela
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September 05 2012
Your current bank will deside the selling price, and your realtor will talk to them to set an asking price and give their opinion on what it will sell for given the comps of the area.
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September 05 2012
 
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