Sarasota Short Sales and Foreclosures

There are a lot of great deals out there. And many that just are NOT.

Every day I speak to someone who is completely confused about why the bank isn't responding, or why a home's price just went UP, not down. The answers lie in the process, one which many people do not understand. Although I have blogged about what a short sale is, this is more to explain the response (or lack of response) we may receive when making or considering an offer.

Q. I made an offer only 10% lower than the short sale listing and the bank responded at OVER list price! What was that about?

A. Banks often do not set the short sale price. We do not know until we make an offer what the bank will really accept.

Q: This home was $199K two months ago - now it is in foreclosure and it's $299K! Why would the bank RAISE the price?

A. The home was likely in short sale at the lower price. You may remember from earlier blogs that the listing agent usually sets the sales price in a short sale, not the bank. The fact that it didnt sell at $199K may indicate that the bank didn't accept offers at that level - and once they owned it, they did an appraisal and determined what they would REALLY take. The banks new price is actually far more realistic - and maybe still a great deal.

Q. I made an offer on a foreclosure and didn't hear a word from the bank - now I hear its sold! Can they do that without acknowledging my offer?

A. While we would think it quite rude not to respond to an offer, the bank has no such qualms. Offers come in, often many offers on the same property. They determine which is best for them and work with that buyer. Other offers are often never heard from again. While it doesnt seem right, it is common. And something to think about - again, many people think that a foreclosure means the bank will give the home away. That is not necessarily the case. They do an appraisal and they know what the home is worth. A 50% offer on an already discounted home may generate alot of ...silence.
Offers to a bank are very different than offers to a seller.

Q. So does that mean there are no deals?

A. Not at all. They are there. But if a home is already priced well, someone will buy it without trying to take another 50% off. Case in point - I know of people who saw a great price, did their value research and found that the condo was an unbelievable steal at list price. Knowing others would agree and offer list price, this buyer offered 10% OVER the list price - and got the condo.

Q. Wait, wait wait - they offered OVER list? Who DOES that in this market??

A. In this market, more so than any other time in recent history, its not about the price on a listing - its about the homes true VALUE. If it is worth $500K all day long, and 10 offers come in at the list price of $300K - but one comes in at $325K - he gets it, and still made a great deal. I am not suggesting we offer over list on every property - I am suggesting that if its a deal, its a deal!

As Sarasota buyers agents, we work to get you GREAT deals. We work with you to make solid investments. We wont let you overpay for a property - ever. But we do continually work to make sure that our folks dont miss great opportunities- and in this market, the opportunities are not always as clear cut as one might think.