ADVICE FOR BUYERS

Be advised that short sales do not generally provide an opportunity to snatch up a property for less than market value. The lender(s) that has a lien on the property ultimately must approve of the short sale price.

Homeowners seek to short sale their homes either when they are in default or in jeopardy of going into default on their mortgage payments.        

In a short sale, the listing agent suggests a price for the listing that he or she feels will attract buyers quickly. With no motivation to protect his or her own financial return on the sale, the homeowner consents to an “aggressive” price.                                                                    

In a traditional sale, homeowners monitor the list price of their homes because they have a vested interest in the outcome. Homeowners in traditional sales are looking to net as much profit as possible after commissions and other expenses.

With the homeowner having no financial incentive from the sale to act as a check and balance of too low of a listing price, many times the property is priced below market value.The lenderis unlikely to agree to a sales price for less than the property is currently worth.

Experienced buyers’ agents know that mortgagees will not approve of selling price that is substantially below market value. They won’t waste their own time, nor their clients’ time, on viewing and pursuing short sale listings that are priced too low.