Master the Short Sale Transaction: Post 3 / The Listing Appointment This is the third in the series of posts on mastering the short sale transaction. If you would like to get up to speed on preparing for a short sale listing, please read post 1 and post 2. In this post, I will discuss my theory on pricing a short sale listing as well as provide a few tips for the listing appointment.
By now, you may have done all the things that I suggested in posts 1 and 2 and are pretty prepared for the listing appointment or possible listing appointment. The only thing that we did not address is pricing the short sale listing.
There are many theories about pricing. Some people price exceedingly low in order to draw in a number of offers very quickly. The disadvantage of that may be that if you do not have an offer near market value, the bank make may not approve the short sale. Others price closer to the amount owed for the borrower’s loans. This may be too high. In my opinion (and there will certainly be many who disagree), you should price aggressively so that you can complete with any local REO listings or recently closed transactions. However, that being said, you should never price so aggressively that the bank would not accept the offer because the purchase price is unrealistic.
For most short sales, lenders are looking for offers near market value. Market value is established on the recently closed transactions in the area. Pricing appropriately is very important so that the bank will accept and approve the short sale offer without too much back and forth negotiating.
At the listing appointment, discuss your proposed price with the sellers. Show the comparables and explain what they bank will be looking to net-market value!
The beauty of the short sale-for the listing agent-is that the traditional seller stalls and objections (especially price) are gone. Since the seller will not net anything in the transaction, most sellers will not be too concerned with the list price. So, usually, this will not be a major matter of discussion in the listing appointment.
Since I have gone on too long, the next post will address the financial statement and the hardship letter-two items that you need to collect at the listing appointment.
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