Short sales tend to be the bane of the Phoenix real estate market. Many agents still refuse to document these listings correctly, only a small percentage of these short sales actually close and the entire process tends to lead to more questions than answers.
The Arizona Regional MLS has attempted to lend some clarity to the situation with a Q&A link off the main MLS site, but at least one of the questions misses the biggest problem that comes from dealing with short sales?
Isn’t the agent being unethical by listing the property for a price below what they or the lender will accept?
ARMLS gives an equivocating answer that says, in short, ethics issues aren’t really their problem. But that answer, and the question itself, missed the elephant in the room – THE BANKS WON’T TELL SELLERS AND LISTING AGENTS WHAT THEY’RE WILLING TO ACCEPT FOR THE HOME.
There are rare exceptions, but for the most part the only way of learning what a lender will accept for a home is to send them a contract and have them give you an answer. Until that happens, there’s no way of knowing. And that’s why the listing agent will tend to put any price at all on the listing to attract a contract.
As for the ethics side … here’s one man’s two cents.
The listing agreement still is a contract between the seller and the listing brokerage. And before the offer can be sent to the lender, the seller needs to agree to the contract. So as long as the price on the MLS is a price at which the seller will agree to sign the purchase contract, the listing agent ethically has done their job.
Lenders, even though they have to approve the write-down between what the home is worth and what they are owed, are not a party to the contract. Holding an agent ethically responsible for a third agent they can’t force to perform makes no sense whatsoever.
ARMLS could have explained this to some degree rather than washing their hands of the matter entirely. I understand why they didn’t, but still think they could have given a very brief explanation. Like the one above, for example.
[tags]Phoenix real estate, short sales[/tags]