Dear Listing Agents,
I am writing this to you because I am noticing two troubling trends in our Vancouver Washington real estate market. The first is that a few agents are listing the properties at unrealistic listing prices. Secondly, some agents aren't being truthful about how far along the negotiation process the property really is.
Listing prices - The chances of the bank accepting $300,000 for a home that comps out at $450,000 is pretty slim. I am not certain whether agent are doing this because of their inexperience with these types of deals or because they have discovered that listing a home at a ridiculous price (btw, not mentioning the short sale in public comments) will cause the phone to ring off of the hook and will help them generate buyer leads. (For most agents I suspect the second theory!) Either way, this is just plain dangerous. Listings with unrealistic prices attached may get a lot of attention but they also put local neighborhood real estate markets into a tail spin! This tactic sets buyer's expectations unreasonably high and, many times, causes buyers to sit on the sidelines in a state of disappointment and confusion. It is not healthy for your business and it is not healthy for the real estate market.PLEASE STOP doing this!
Tell the TRUTH - When an agent calls and says, "I have a client who is interested in your short sale at 1313 Mockingbird Lane. How far along are you with the bank?" TELL THE TRUTH! If you haven't faxed a hardship package yet, then tell us! If the bank is saying the it will be 30 days until a negotiator is assigned, then tell us that too! This is the information that we need to keep the deal from exploding a week before closing. I have clients who are interested in short sales and have the patience to see the deal through. I have coached them about the process and have told them that some of the banks may need 90 days or more to negotiate the deal. They are O.K. with that. What they aren't alright with is when an agent says something like, "We have been working with the bank for months and we are expecting a final number within the next two weeks." And the two weeks come and the two weeks go. And two more weeks come and go. And they decide to see more houses. And I take them down the street and buy another home and leave the other agent sitting with their listing and no buyer. If it going to take 90 days, that is fine. Just be honest and say so!
When you choose us to handle your Vancouver Washington real estate needs, you choose a team of realtors® who care about you and your family. Buying or selling a home is always more enjoyable when you work with professionals who will listen to your needs and who will work together with you to achieve your objective. We are very familiar with all types a real estate in Clark County and we specialize in Vancouver, Ridgefield and Battle Ground. We are also very experienced with new home and custom home construction having assisted several local builders in selling new neighborhoods in the Vancouver Washington area. Additionally, we have helped numerous families build their own Vancouver Washington dream homes. We are dedicated to helping you make intelligent, informed decisions and to providing you with exceptional service. Go to www.ernw.org for more information. See our video here.
Mark Hall
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Very true on all points here Mark. As the buyers agent or listing agent we all need to be on the same page.
We have to list at fair Market Value.. Good post Mark
It's a shame that no one seems to want to be "up-front" about the status of a short sale-including the lenders.
My last two short sales went through with minor glitches.
The current ones are problematic in the sense that the lenders won't respond to any packages sent to them unless they are complete, WITH AN OFFER. Although I've provided everything that is required (hardship letter, last 2 pay stubs or proof of income, last 2 tax returns, authorization letter, financial statements, listing agreements, comps), they will not even look at them unless there is an offer on the table.
This is why most listing agents will tell buyers agents to write an offer to get the ball rolling.
Some of the comps I've used include REOs. I have a waterfront condo that I initially priced at $599K (owner paid $810K two years ago). This was based on recent sales, including an REO, plus properties currently listed. But when there was no activity and a recent comp dropped its price to under $500K, we had to reduce the price by $50K.
Still no offer.
My advice to buyers and their agents: Write that offer. No one knows today what lenders will do. Some will counter-offer. So even if you think your offer is low, make it strong enough that it will invite a counteroffer. Some listing agents may price properties aggressively to stimulate demand. Others will price it according to comps. Have the agent do his own comps to enable the buyer to make informed decisions.
I had a short sale listing for $105,000. We had an offer for that amount but the bank foreclosed and sold it for $98K. Does that make sense? No!
Pacita - I hear you loud and clear. I have no problem being the offer that gets the ball rolling as long as I know what to expect. Regarding your condo and the market price, at least you are running comps to determine value. I have run across five listings in the past week where it is obvious that comps weren't consulted. Unfortunately my client found these listings via craigslist. No mention of short sale anywhere to be found. On one of them, comps would put the value at over $100k more than the listed price. I checked the listing history onlt to find that this is right where the home was brought onto the market. In my opinion this was put up as a lost leader to get the agent's phone to ring. I bet it is working.
Mark, I had "short sale" on the MLS listings, and I thought I had it on my vlfyers and postlets for posting on craigslist. I went back to make sure I had that information since this will obviously make a difference to both buyers and their agents. Thanks for the reminder.
Good luck!