If you’ve read this blog for any length of time you know I’m not a fan of short sales for my buyers.
The combination of an imaginary list price, fairly minimal motivation on the part of the bank and the extended response periods that can result in unforeseen opportunity costs tend to make a short sale – a home where the owner owes the bank more than the house is worth – unattractive as a possible purchase. This is especially for someone looking for an owner-occupied home and a set time frame for moving.
Short sale listings are an exercise in frustration primarily because they clog the MLS and can confuse consumers looking at third-party websites at prices they believe are real who are unaware of the strings attached. When running comparables for a home coming to the market I ignore the short sales as they don’t represent true competition. I believe most agents know this.
Yesterday it was suggested to me by one buyer that agents who list short sales are acting unethically. And that’s where I have to disagree.
We as listing agents don’t set the list price. The homeowner does. And a homeowner has the right to market their home at whatever price they choose. There’s no law that requires them to sell at that marketed price even if a full-price, non-contingent offer is received. Unless it’s signed it’s not binding. This applies not just to short sales but to all listings.
There are no MLS rules prohibiting homes from being advertised at prices that haven’t been approved by the bank. The seller initially has to accept an offer at whatever price is submitted and even signs the contract, contingent upon bank approval. If a buyer is unaware of the extra caveat in the beginning, they’re made aware as part of the offer acceptance.
I can see where some buyers are frustrated by the short sales, just as many of us agents are, because they aren’t aware up front that the list price may not be approved by the bank. That’s part of the issue with searching for real estate online. There’s an immense amount of information available but not all of it’s complete.
This may seem like an agent-driven issue but it’s not. The same thing can and probably does happen in craigslist. It probably happens on Zillow when homeowners enter their own home for sale. It happens on any of the For Sale By Owner sites that unrepresented sellers tend to prefer.
And simply labeling a property as a short sale isn’t sufficient as not everyone knows what the term means. And disclosure without explanation is next to useless.
Short sales can be unattractive. They can be irritating. But unethical? No way.[tags]Phoenix real estate, short sales[/tags]