Profile picture for zuser20140611025911225

too good to be true house?

I found a short sale on a home my wife and I really like an. Its been on the market for almost 2 years, taxes aren't crazy, the house is move in ready.... its assessed north of 120k and is now listed for half that... it isn't beat, the price is great now but hasn't been what I would call unreasonable for at least 4 months.... Why is this house still on the market?? I looked at over 200 listings in my area ... for the money, this is hands down the best value- its the only on that needs 0 work! The realtor did say its been under contract twice. Once for 6 months, another time 4.. the 4 months, I'm told the buyer gave up waiting for the bank. Did the bank always come back with sky high offers since the place is nice? I can do he asking price... I'm scared I won't be able to do what they will want... I know my limits and buying this at asking price is pretty close to it. I just keep thinking "if it looks to good to be true......."
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June 11 - Philadelphia
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Answers (4)

Profile picture for Pasadenan
A seller can advertise for anything they want.  But the reality is, that if the loan won't be paid off, the bank has no obligation to take a loss.  You would think that if a listing is advertised as a "short sale", that the Bank would be required to give approval of a listing price first; but that is not the way it works.  And you can be pretty sure that if an owner is selling short, that they have no intention of bringing cash to the closing table to pay off the lender.

It gets even messier if there is a second lien on the property.  Though the first lien holder may be willing to sell it short, if the second lien holder is not willing to take the loss, it can't be sold if the lien won't be paid off.  Many times the second lien holder would rather it go into foreclosure, even if that means they won't be paid at all.  As long as they continue to be paid something, they figure that is better than getting nothing.

So, if one buyer waited 6 months, and the bank didn't approve it, and another waited 4 months, and the bank didn't approve it, and it has been on the market 2 years already, why would one want to get caught up in that "waiting game" only to have your offer "rejected" 9 months from now?  If doesn't make any difference if the owner accepts an offer on a short sale; if the loan is not being paid off, it is the lien holders that determine whether the loss is acceptable or not, and what they consider fair market value.

If the owners really can't afford the payments, it will eventually be foreclosed on, and the bank will buy it back at the auction, and the bank will eventually put it for sale as an REO at market value.  If it won't sell as a short sale, you might as well wait it out.
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June 11
Profile picture for wetdawgs
I agree with Mack.   Bargains do not go unnoticed.    The bank may be wishing to get market value so they don't lose so much money,  so "sky high" may be market value.   The seller needs to listen to the bank's value and advertise appropriately otherwise you'll be in the same mess for months and months.
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June 11

I'm with you, Dan, and I feel the same way about condos - these are specialties for which agents should be required to have advanced training and a special license endorsement.

To answer the original poster, I'd have my agent ask the listing agent, "Why?"

All the best,

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June 11

The house should be listed at today's market value. Lenders know they can only get so much for any given house so they are willing to look favorably at offers for Fair Market Value and they know what that number is. The Listing agent has not done anybody any favors by listing it too low.

I have seen this done here, where the agents think the bank will come back with a higher number and the buyer will pay. The reality is that, while the lender does give back a higher number, it is not a jacked up number just a Fair Market Value number.

I see it as a variation of "Bait and Switch" where the agent gets to "pretend" to be innocent but it is very bad business and makes us all look bad.

In my opinion Short-Sales should require an endorsement for short-sales from the state or a different class of license like a CDL for driving trucks





 

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