Profile picture for kravitzlr

Why would a short sale go up in listed price after getting approval?

Mls price went up $35,000 after getting bank approval after a few months. Is this a common practice?
  • November 23 2011 - Port Saint Lucie
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Answers (8)

Profile picture for Rita Shaw Broker
Many short sale listings are listed prior to bank approval, Sometimes they are  listed significantly lower than market value.The lender ultimately determines the sales price based on their appraisal.It is best to look at pre approved short sales. If you think the price is fair, buy it.
  • November 23 2011
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Profile picture for kravitzlr
Thanks sunnyview!
  • November 23 2011
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Profile picture for sunnyview
If you already got the bank approval, then it is hard to say. It is possible that the bank appraiser felt the property was worth more so they requested a higher listing price. I see no reason for it, but often one part of a bank does not know what the other is doing.

The only possible reason I can see would be to maybe try to drive a higher offer on a different bank owned property owned by the same bank. Otherwise I see no benefit to them at all. As long as your contract is in order, you should be good to go no matter what the new MLS price is.
  • November 23 2011
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Profile picture for kravitzlr
We did get both bank approval as I stated above. Just confused on the price change.
  • November 23 2011
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Profile picture for sunnyview
I have seen this in my market. Sometimes it means that the owner was listing the house without bank approval hoping to get an offer on the table to enlist bank agreement to the short sale.

If the contract was signed by the owner, but the price was not agreed to by the bank, you may have an issue. The owner would have to get the bank to agree to your price or pay the difference out of pocket which most owners cannot or will not do. If you have an agent, ask them where you stand and read your contract carefully.
  • November 23 2011
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Profile picture for kravitzlr
It doesn't change the fact that we have a contract though, right? We agreed on the price that they wanted, which was $30,000 more than the original listed price.
  • November 23 2011
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The approval price may have been this price.  It may have been listed too low and the offer was not accepted, which is why it came back on the market.
  • November 23 2011
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Profile picture for Rita Walker
There could be any number of reasons for the increase.
   
    The bank may have found it to be worth more money than the amount for which it was listed. After the lender receives an offer they usually have an appraisal performed.

    The area info may have changed since the original listing of the property ... more sales, higher prices, etc.

     Improvements may have been made in order to sell the property.

Remember that the lender is trying to settle a debt. The higher the sale price the less they have to write off.

  • November 23 2011
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