People often wonder how to set the list price on the property listed as a short sale. That’s because the price that will be approved by the short sale lender is often an unknown factor at the time of the short sale listing appointment.

There are many theories about pricing. Some people price exceedingly low in order to draw in a number of offers very quickly. The disadvantage of that may be that if you do not have an offer near market value, the bank make may not approve the short sale. Others price closer to the amount owed for the borrower’s loans. This may be too high. However, given the current real estate climate, there are many buyers and there is not a lot of inventory in most parts of the nation. The seller’s market combined with the fact that many homes are receiving multiple offers does drive the prices and home values up a bit. Short sale lenders know about the market and are not looking for “lowball” offers.

For most short sales, lenders are looking for offers at around market value. Market value is established on the recently closed transactions in the area. Pricing appropriately is very important so that the bank will accept and approve the short sale offer without too much back and forth.

At the listing appointment, discuss your proposed price with the sellers. Show the comparables and explain what the bank will be looking to net: market value!

The beauty of the short sale (for the listing agent) is that the traditional seller stalls and objections are gone. Since the seller will not net anything in the transaction, most sellers will not be too concerned with the list price. So, usually, this factor will not lead to a major discussion at the listing appointment.

Of course, taking the short sale listing is easy… it’s negotiating and obtaining approval that can be a challenge. If you need any help with the short sale negotiations, please do not hesitate to contact us.