Listing The Short Sale
When the homeowner calls and has decided a short sale is the only alternative, the listing agent must move rapidly. Time is of the essence. The listing homeowner has agonized over this dilemma. Either the house is headed for foreclosure or the seller has already received a Notice of Default.
Ensuring the success of a short sale is often about price. Unfortunately for the seller, the short sale listing price is rarely reason for celebration. After all, the short sale is predicated on financial hardship and shrinking market value. The purpose of the short sale is to conclude a transaction that is acceptable to the lender before foreclosure becomes necessary. The homeowner is attempting to sell the property for less than is owed and get out of the transaction with a semblance of credit and credibility. Short sales are tough on the sellers and tough on the lender.
Pricing the short sale is about bringing five parties together in a compromise. Shirt sale listing prices are not based upon fair market value. The truth is that short sale prices are generally below market value. The short sale listing price must appeal to five interested parties.
· The short sale bank – in explaining the listing price to the bank, the agent should use pending sales comparables. By the time this transaction closes, those will be relevant.
· The buyer – short sale buyers do not expect to pay market value. Short sale buyers are valued commodities. They are also going to have to wait 90 days or more to close. The price must motivate them.
· The buyer’s agent – short sales take longer than a conventional sale and the agents generally make less money. The buyer’s agent will need to see this listing is a goof offer and a viable transaction.
· The buyer’s lender – the buyer’s lender will be using an appraiser. Today’s lenders need appraiser that meet stringent lending requirements. The price cannot be too low for the buyer’s lender.
· The seller - the seller will not be receiving any equity from this transaction. However, the listing price must assure the seller that all obligations are satisfied and retired.
Experienced short sale agents know how to perform and how to arrive at the best price to achieve the seller’s goals. It is a hard process but one that is saving many of today’s homeowners.