This 3 + 2 pool home in La Crescenta was just listed in the MLS (multiple listing service) for $515,000.  Wow! What a price, it should certainly be worth nearer $600,000 (or perhaps even more). What’s the catch?

It’s a short sale and the listing agent made up the asking price.  The asking price is subject to the lender’s approval of the short sale.  And because banks report to stock holders and are under scrutiny, they tend to want to sell homes for market value, which means that they will not approve this silly price.  Just one more reason why Realtors dislike short sales.

What is the agent’s motivation for grossly underpricing the house?  Likely to obtain as many offers as possible to prove to the bank what the “value” is, then the bank may elect to approve the short sale and sell to the highest bidder.  

Advice to home buyers: work with an experienced Realtor and try not to get caught up in this silly pricing.  Short sales are not selling for 10 - 20% below market value.   Additionally in a short sale, AS IS, is truly AS IS, buyer pays for termite and some other fees customarily paid for by the seller.  Have your agent ask questions: How much is owed? How much is the first?  Is there a second?  A Third?  The more loans on the home, the less likely the short sale will succeed. 

And shame on Realtors for grossly underpricing just to get a stack of offers to submit to the bank.  I hate being used and you should too!

Related Posts:  Are short sales MLS pollution?      Learn why most Realtors dislike short sales