More Bad Information About Short Sales

Jonathan Dalton, Phoenix Real Estate AgentI feel sorry for the folks listening to Phoenix’s KKNT this afternoon during a segment with someone billing themselves as the “short sale shark.” Here were two pieces of misinformation provided in the opening five minutes of today’s segment.

Short sales are an exercise in “equity creation.”

No, short sales are an exercise in negative equity elimination. No equity is being created for those purchasing the property. Eliminating negative equity does not in itself create any true equity.

People buying short sales are buying properties “at a discount.”

At a discount when compared to what the last person paid, absolutely. But that doesn’t mean that the home’s being bought as a discount to current market value. It could be, but isn’t guaranteed to be. And more often than not, it isn’t.

I stopped listening after the initial segment as I simply couldn’t take it anymore. For those who are looking to purchase a short sale, here’s your best bet method:

1) Don’t bother making an offer on a short sale

2) Wait until the auction and see if the home reverts to the bank

3) Wait for the home to appear on the MLS with a valid list price, then make an offer

You’ll get answers much faster and, quite possibly, you’ll get the discount you were hoping for when you first started looking at the property.

As for today’s radio program, it’s further proof that from a financial standpoint I must be doing something wrong because there seems to be more money in telling agents and the public how they have to do things than actually doing them yourself.

[tags]Phoenix real estate, short sales[/tags]

Jonathan Dalton

Jonathan Dalton is a 40-plus-year resident of the Valley and has been helping folks buy and sell homes since 2004. He can be reached at 602-502-9693 or info at allphoenixrealestate.com.

0 Comments

  • Log Homes For Sale In North Georgia 10 years ago

    Good point about waiting for it to appear on MLS with price to make a valid offer.

    I don’t understand why people don’t get that the price is reflective of the last homeowner sale and a short sale may not be the banks bottom line.

    Great post and in this market this is probably the most understood. Having a good realtor can best help guide you when buying and selling a home. I always like to think great realtors don’t need to advertise and certainly not on the radio. They are known by reputation and have more than enough business.

  • Jonathan Dalton 10 years ago

    I’d like to think so, too. 🙂

  • I am listing 3 short sales in Phoenix and Scottsdale | Phoenix Area Real Estate Blog 10 years ago

    […] right. While I probably haven’t made it as public as Jonathon Dalton, I’m not much of a fan of short sales. Monday, Kelley Kohler was talking about how few short […]

Real Time Web Analytics

Send this to a friend