Sarasota Short Sale Pricing is Changing

This week we received word that the short sale process is being revamped and standardized at the highest levels. The most welcome news is that if the new provision passes, the banks will actually be setting the short sale price, not the listing agent.

I have heard a collective cheer go up amongst my customers. The short sale process is daunting, and most frustrating for many people is seeing a price on a listing that may not be acceptable to the bank, even if they make a full price offer.

I have noticed lately that when the daily "status change report" makes it to my inbox, that many properties have raised their price by a considerable amount. Further investigation shows that they were a short sale that has gone pending at the higher price. For instance, this morning, a home which had been listed at $109K went pending at $136K. What happened? This may be price the bank would actually take as opposed to a fantasy price set by a well meaning listing agent.

So when the short sale pricing is set by the bank, the issue of "list price reality" will be solved. What folks are not going to like, however, is that the false veil of "rock bottom prices" will be lifted. Many people express shock when a home goes into foreclosure, and the bank actually raises the price of the home from its short sale levels. It's not a surprise to me - the bank is simply finally revealing what they will accept. The reality of that number has been the same all along - we are simply finally privy to it.

Take heart, folks. Many of those prices werent real anyway. I for one would rather deal with accurate reality than fantasy.

Postscript

There is a whole other discussion to buying a short sale - if the short sale price is unbelievably low, the chances of the winning bidder paying that price is slim. They probably made an offer OVER list price. If the home is set 50% below market, making an offer 5-10% over list still makes perfect sense in order to score a great deal over the competiton who are likely offering at or less than list. In case this all sounds familiar, it should. It's called a "bidding war", and it happens in any market for well priced properties.