Worried about my short sale, supposed to sign listing agreement tomorrow

I owe: $265,000

Current tax assessment: $251,000

Recent sales (only 3 in the past 6 months): 11/9/2010 @ 245,950 - 11/16/2010 @ 215,000 - 2/17/2011 @ 198,000

Servicer: Navy Federal Credit Union

Investor: Fannie Mae

 

My short sale specialist wants to list the home for $175,000. The plan is to sign the listing agreement tomorrow and to hold an open house on the 14th. I was told that I would meet the realtors the following Tuesday to discuss the offers and submit the best to the bank. They explained that the offers may be too low for the bank, but even if the bank rejected it, we would then know how much they need to get a deal done. They also said that they will try to negotiate with all potential buyers to get the highest possible offer. 

 

According to Fannie Mae, we have to stop paying our mortgage to be considered for a short sale. Each month that we wait is significant. I'd like to avoid being 90 days late, if possible. My concern is that our house will just be sitting out there while the bank goes through the process of rejecting an offer that we expect them to reject in the first place. 

 

My other concern is that this is only priced to attract short sale investors. A cash offer is nice and all, but investors have nothing to lose by making a crazy low offer. My fear is that this open house will only be investors that are trying to snag a great deal. If that's true, then the realtors have nothing to lose by submitting an offer the bank won't accept. Either it goes through and closes or they reject it and we start over with a higher price in mind.

 

This brokerage specializes in distressed property and allegedly has closed hundreds of short sales over the past few years and have numerous deals in the works.

 

Thanks for your feedback.

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Permalink Reply by Samson_is_Furry on May 9, 2011 at 4:51am

Makes sense to me. I'm going to call a few realtors and see what I can come up with.

I really appreciate your help. Furthermore, I have a new appreciation for your profession as well. I can't imagine the hardships that you find yourselves in the middle of when dealing with distressed property. Real estate expert, bank expert, negotiating expert, and counselor...it has to be a tough job.

Permalink Reply by Samson_is_Furry on May 10, 2011 at 2:47am

Hey folks, I've taken your advice as well as the advice of some local realtors and asked that my listing to be removed. We are going to go in a different direction. The listing agent was very resistant to removing the one-day old listing. She actually did not agree to do it on the first call and will be calling me back later today. Thankfully, I had her write into the agreement that we could cancel the listing at anytime without reason. Should this be an issue?

 

I feel terrible for wasting her time, but my wife and I are very uncomfortable with this listing.

 

Thanks!

Permalink Reply by Jeff Payne on May 10, 2011 at 3:42am
You did not waste anyone's time!  The agent wasted your time
Permalink Reply by Janice MacMillan on May 10, 2011 at 8:46am

Mike,

I too use the stategy mentioned above. You will save yourself a lot of frustration and headaches if you price the property accordingly, then make price adjustments every so often.

I typically set up the price reductions when I do the listing agreement so everyone is on the same page. And will schedule several price reductions and have a predetermined amount for that reduction. Then have homeowner sign it.

Your agents duty is to get an best offer possible and get as close to the FMC as possible. If you start too low you will risk buyers walking due to the bank declining the ever so popular low ball offer that can not be worked with. 

I have come to expect, at least in our market, that once those the words "SHORT SALE" are put into the MLS  it sends up a red flag to every buyer and buyers agent out there that this is some sort of fire sale and they can throw out any number and have it accepted by the bank. (no offense to buyers agents, there are some out there that are wonderful but there are some that simply do not have a clue or have never been involved in a short sale)

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