No One Wants to Play 'Guess the Price'

We have a problem. A serious problem. Okay, we have lots of serious problems, but this one is seriouser than a lot of other serious problems. The problem with our problem is I have to be careful talking about our problem because I wouldn’t want anyone to think that I’m trying to meddle in anyone’s business. However, this is such a big problem that it can’t be ignored. So it’s analogy time at the ole blog.

Let’s play a game. It’s called Guess the Price. I’m going to offer something for sale and you have to guess the price I’m willing to accept. Sound familiar? 

We’ve all got to put our best effort into every aspect of our business or we will see our profession go right down the tubes. It won’t be because of a slow market, it will be because using a Realtor in a real estate transaction will be viewed as a frustrating, risky, and angry experience. Who would want to add grief to their lives if they didn’t have to? And trust me, you can’t make a living selling Brady Bunch trading cards – especially if you aren’t willing to include the Marcia cards too!

RE: No One Wants to Play 'Guess the Price'

With a first offer to the lender, the lender will tell you the lowest price they will take. I have price my short sale at that (lenders sale price).

RE: No One Wants to Play 'Guess the Price'

So, What is a Realtor supposed to do??

The lenders will not tell us what they will take on a

short sale. They even keep the Brokers Price Opinion to themselves in most cases.

They do not know  an acceptable price themselves until an offer has been submitted & has been thru the 27 various departments. And to add insult to

injury, Your buyer & yourself will not be notified for

60-90 days. I have submitted over list price offers

only to have them turned down because another offer came in first by 24 hours !

The Short Sale is a new experience with Sellers,

Lenders & Buyers & Realtors. The main responsibilty rests with the Lenders, they do not have a system in place to handle all the offers.

The Realtor must protect themselves from Lawsuits with as much DISCLOSURE NOTICE as

possible. The consumer needs to be an informed

purchaser when they enter the Short Sale process.

And every Realtor who is going to represent themselves to a buyer or seller MUST have the

the KNOWLEDGE to actually represent the consumer. You can not leave the details to a listing

agent when you are presenting a offer to purchase.

I must add, a buyer would "never consider" a law suit against 

A Lender for a missed short sale opportunity, however a Realtor is smaller target & will be blamed for any perceived  mistake on a Real Estate Transaction  deserved or not. 

Knowledge is Power, For all else see the

disclosures.

My next career choice is Proctology !!   

RE: No One Wants to Play 'Guess the Price'

The best way to handle this is to do an apples-to-apples CMA. The lender ultimately is going to send either an appraiser or BPO agent out to establish value. They are going to try to pull comps that are the same style and have sold in the last 60 days, within 250 sf, and within 5 years of age, and within 1 mile or the same neighorhood, if possible. It may be necessary to expand some of the criteria, but those are the instructions from most lenders.

Pricing property is pricing property is pricing property. Look at what has sold and how long it took, and make sure you're comparing apples to apples. Double check that the active competition hasn't fallen below that mark. That should tell you where to price.

The lenders expect you to reduce the price slightly every few weeks if it isn't sold. That will show you made a good-faith effort to get as close to market value as possible. Mind you, I said market value ... not what the homeowner owes on a short sale. That is what the lenders ultimately will be looking at.

RE: No One Wants to Play 'Guess the Price'

The appraisal or BPO may not be ordered for several months, at which point, guess what? The seller is then several months closer to foreclosure and may very well no longer have a contract because the buyer will often withdraw when presented with the bank's counter.  Specifically, the buyer withdraws because they had such an unrealistic expectation due to an absurdly low asking price.  As a listing agent, how is that working in your seller's best interest? 

It is correct that a lender will not disclose a "bottom line" number up front, but there are many general guidelines that we as agents should utilize in a effort to paint a truer picture. Guidelines based upon percentages of fair market value, loan payoff(s), etc etc ... In a nutshell, if a short sale listing has a $500,000 mortgage balance and a likely fair market value of $400,000, it would be (in my opinion) patently misleading to list it for $300,000.

RE: No One Wants to Play 'Guess the Price'

As professional agents, we should be able to complete a CMA and be able to provide the seller with a "price range". My biggest frustration as a listing agent is when I actually obtain a "Bank Approved Price" and then offers come in 20% plus lower than a current bank approved offer.  In our market, we certainly have to account for continued depreciation, but we have to learn to negotiate with our buyers as well.  It's in our best inerest to have buyers pur in reasonable offers. 

Merry Christmas...to all.. Happy Holidays and we'll be fine in 2009! 

RE: No One Wants to Play 'Guess the Price'

"Pricing a property,is pricing a property is pricing a property", IS NOT PRICING AS PROPERTY.! The naivete' of the writer, as with many Realtors,is astoundingly apparent..Ignorance ,  basic R.E. education,inexperience  and a "wait & see" position,, breeds and defeats an atitude of success. Blaming asset mitigator/managers,the mortgage company and your ex in law, is an easy way out. BPO's are not as simple as doing a CMA. BPO's may be manipulated by the "order giver" in a variety of subtle differences;after all, they  have financial interests in the matter too! A "30-90 day or 90-120 day price", may be used by the manager to influence the list price. Know & understand his/her pricing philosphy.Simplpicity is not the norm.Place yourself in their positionand you will have a better opportunity extracting the best  price level for the property.Sure there are frustrations, long turn around/response times. A beligerent atitude with the asset manager will lead nowhere. Be flexible,  They have more to contend with than just your particular short sale. Start educating yourself, go into more depth & detail. After all, it's your livelihood. There are basic guidelines established  directing one's starting effort. It's an uneven track, an unpredictable trail. Be prepared, be aware and be ready to change coures at a moments notice. Learn,LearmLearn.

RE: No One Wants to Play 'Guess the Price'

In my opinion the Short Sale is one of the main reasons the downturn has lasted so long. They are putting downward pressure on prices because agents are pricing these homes wherever they want to.

In my belief I think we need to either get rid of Short Sales or have an appoved price from the bank before the homes can get listed.

RE: No One Wants to Play 'Guess the Price'

The naivete' of the writer, as with many Realtors,is astoundingly apparent..Ignorance ,  basic R.E. education,inexperience  and a "wait & see" position,, breeds and defeats an atitude of success.

Ah, Thank You Mr. "Anonymous"!  My wife hasn't called me any names for the last few days. I guess with the joy of the holiday season and all - and here you have called me ignorant and naive in one sentence!

Well, I assure you I am ready to change courses at a moments notice but for the time being I have "learned, learned, learned" for my own sanity and my buyer's to stay as far away from short sales as possible!

RE: No One Wants to Play 'Guess the Price'

>>> The naivete' of the writer, as with many Realtors,is astoundingly apparent..Ignorance ... inexperience  and a "wait & see" position,, breeds and defeats an atitude of success. <<<

The naivete and inexperience of the above comment's author is quite obvious ...  Ask yourself, why, why, why would any buyer purchase a short sale to begin with? It is a process that may take months to complete. With all the attractive, available  inventory out there (competitively priced, mind you)  WHY would anyone attempt to buy a short sale? There is only one reason - It must be a great deal. 

This will have run its course in the fall of '09, at which point prices should level out. That will mean that we will have, at that point, seen 4.5 years of value declines. 

RE: No One Wants to Play 'Guess the Price'

>>Pricing a property,is pricing a property is pricing a property", IS NOT PRICING AS PROPERTY.! The naivete' of the writer, as with many Realtors,is astoundingly apparent..Ignorance ,  basic R.E. education,inexperience  and a "wait & see" position,, breeds and defeats an atitude of success.<<

Hiding behind the shroud of anonymity and cast aspersions at others ? Is this what the code of ethics means to you? This is a poor representation of our status as REALTORS, Not to mention the remark is nonsensical. Just out of curiosity how does one… breed and defeats an atitude (sic) at the same time??

PLEASE refer to the Preamble to the Code of Ethics and note… they refrain from making unsolicited comments about other practitioners. In instances where their opinion is sought, or where Realtors^® believe that comment is necessary, their opinion is offered in an objective, professional manner,…

 >>Blaming asset mitigator/managers,the mortgage company and your ex in law, is an easy way out. BPO's are not as simple as doing a CMA. BPO's may be manipulated by the "order giver" in a variety of subtle differences;after all, they  have financial interests in the matter too! A "30-90 day or 90-120 day price", may be used by the manager to influence the list price. Know & understand his/her pricing philosphy.Simplpicity is not the norm.Place yourself in their positionand you will have a better opportunity extracting the best  price level for the property.<<

Let’s look at this one item at a time; I don’t recall the poster “blame” anyone for anything. Yes the data in the analysis can be manipulated by the “order giver” but that is their responsibility. It is not your job to “…understand his/her pricing philosophy” it is not your job to “…Place yourself in their position… extracting the best price level for the property” that is their job the same as it is not your job to “price” a home for a seller. You are there to present the market conditions, pricing structure of closed and competing comparables and assist the seller in determining the price THEY would like to ask for the property. By “placing yourself in their position” are you not now making choices for the seller or concerned party, are you really in a position to act “AS the seller” or is your position to provide current and accurate information FOR the seller? You may want to give this some thought.

RE: No One Wants to Play 'Guess the Price'

Thank you, Bill! 

RE: No One Wants to Play 'Guess the Price'

The only way to fix this is to create a section of MLS that is strictly for short sales. This section of MLS should not be linked to the other part of MLS so people "the public" will not see these listing unless an agent has pulled them up. This problem is a problem because our MLS links to every website out there and when it does so do these ridiculous listings.

RE: No One Wants to Play 'Guess the Price'

I believe that to price a short sale a Realtor should start with a CMA.  Then lower the price by 10%, and keep lowering (not 10%, use your knowledge to decide) it every two weeks or so until you get an offer.  That offer can then be submitted to the lender.  Until a property is priced to get interest, it is too high.  Property will sell in this market with a compelling price.  Just ask Gene Rivers!  He taught a class yesterday and proper pricing was mentioned.  It is not a fun proccess, however it works!