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Is this real estate agent jerking me around?

My husband and I are first time home buyers. We were approved for 130,000 and are in love with this house listed for 125,000. We feel like we'd be more comfortable spending no more than 120,000. Anyway it's a short sale which I know means pretty much the opposite of short. It's listed price has gone up and down dramatically over the last year. As low as 122,000. I emailed the agent wanting to set up an appointment to view the home and possibly make an offer. Her reply was they are firm on price. Also the house is BPO price. Should we hire an actual appraiser in this situation or just rely on the brokers appraisal?
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March 07 - US
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Always use a Buyer's Agent.  The concept of the Buyer's Agent was created with Consumer Protection in mind (for very good reason).  
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March 07
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"Is this real estate agent jerking me around?"

I don't think that the agent is. If you are first time buyers, I would caution against dealing directly with the listing agent since you would be better served by finding a buyer's agent that could run comps for you and help you structure an offer.

If the house does not have comps to support the 125K list price, it will not appraise and that can open up further negotiations. It is good to try to stay within your budget, but honestly the 5K added to your mortgage should not cause you to walk away from a house that is a good fit.

Short sales are their own type of animal so the bank often sets the price. I would find an agent to help you and make an offer. Keep your offer as simple as possible upfront and hope it is accepted. Then, see if you can negotiate other things once you hit the inspection period like lender credits or repairs. You are really not that far off on price so I think it might be worth taking chance.
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March 07
Look at the bigger picture.  Is loosing the home over $5,000 worth the trouble?  Don't be short sighted as the property values are rising and you will look back in 5 years and be glad you did it.

There is no guarantee the bank will accept $125,000.  It still needs to be approved by the lender and you still need to obtain a loan.

Go for it!
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March 07
Sounds like you are talking with the listing agent and so you will get the reply you got. You should have your own agent working for you, not the seller.

Short sale list prices are like bait on a hook. The bank does not come up with the price, the seller and their agent dream it up and change it often to attract a big fish. Once hooked the offer is then sent to the bank to approve the loss they will have if they accept the offer you made. Even at the listed price the bank will lose money so getting them to lose more will be difficult. Most often the bank comes back with what they will accept and it is almost always more than the listed price -- so be ready for that. It can also take 1-3 months to find out.

You are in for a rough ride and you will need a good agent on your side.
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March 07
First, you should have your own agent representing your interest.  There are times that I do practice Dual Agency (representing both parties) in short sales because it's easier, takes less time for me to complete the transaction plus I am able to keep all parties happier with the slow process of a short sale.  

Did I just talk out of both sides of my mouth?  No, because every situation is different.  Most times, I only represent one party in a transaction but IF an opportunity presents itself to work with both clients, I will consider it and only after gaining written confirmation from all parties to the real estate transaction will I work for both sides simultaneously.  Tennessee is only one of a few states that still allows dual agency.

Short sale properties have lost vogue in the past six months.  The opportunities to purchase properties prior to foreclosure are all but gone.  Several reasons - real estate agents don't make as much money on them plus the federal programs have been cut.  I hear you saying they have not been cut...well not everyone has but the ones that allow the door to be closed for good has...I'm talking about the Mortgage Debt Relief Act of 2007.  Distressed property owners lost their major incentive to complete a short sale on December 31, 2013.  They now have to pay income tax on mortgage debt forgiven on a short sale.  Bottom Line, it's easier to file bankruptcy than to short sale a property today.  A Chapter 7 is easier for people to understand as it finalizes the entire situation at once.  

As for your specific situation - Can I tell you 100% that the price given to you is the bottom line?  No, but I can tell you how to find out what type of loan the current property owner has to be used as your secret weapon.  Either call or go to the Register of Deeds office in the county were the property is located.  Obtain a copy of the Deed of Trust (mortgage document filed publicly) and see if it has FHA/VA/USDA or Fannie/Freddie mark on it.  Each loan type is different.  The investors must follow the rules of the loan type to be reimbursed for the lost income as well as the principal amount of the loan.  FHA Loans are the ones I prefer to take on because the rules and regulations are provided in Mortgagee Letters and I can put teeth into the negotiator as a period of time has passed and have a relevantly good chance of getting the homeowners out of a bad situation.

BTW - FHA Short Sales are generally able to be purchased for 94% of the Fair Market Appraisal which is generally a couple months old.  So if the market has risen, you might have a better deal but 94% is good in my market.  This is FHA only and there are times that figure does go up to 100% without any discount.  Examples would a HOA Lien or a 2nd Mortgage. 

Best,

Bob Sorey
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March 07
 
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