Is a short sale even worth attempting if you are the first in the neighborhood?

Reblogger Donald Bradbury
Real Estate Agent with Bradbury Team Prudential Patt, White Real Estate

Original content by Amy Gooden

I am looking for help from all of the ActiveRain short sale experts out there. Here's how the story goes:

I was contacted by an agent that I worked with on one of my previous short sale listings. She was so impressed with our process that she wanted to refer a friend in need of a short sale to me. I gladly took the listing and got to work.

This home is a neighborhood that is small and has never had a foreclosure or short sale. In fact, my seller was the last comparable sale in the neighborhood when he bought the home 2 years ago. No one has sold their home in the neighborhood since the builder.

Originally prices were in the $240,000 to $260,000 range. However the market has changed and the smell of new drywall and fresh paint has worn off.

My seller originally listed at a price that would allow him to avoid a short sale ($260,000 range). Over the course of 1 1/2 years on the market, he lowered his price multiple times to where we he was when I took the listing($225,00).

During the first two months I had the listing, we did 3 price drops. Despite our efforts, we had only two showings and very little Internet traffic and no calls.

We got lucky. One of the two showings resulted in an offer that was fair when compared to our list price.

Now on to the bank with the offer.

Despite my best efforts with the BPO agent, the BPO value came in WAY too high. When I looked over the BPO report, I couldn't really fault the agent that complied it. Of course, he had to go outside of the neighborhood for comps. Looking over the data, you would guess that this one neighborhood had a little black cloud hanging over it. Everything around it was selling well and at much higher prices.    

When I argued with the bank and reminded them of the challenges within the neighborhood, our negotiator responded with, "I'm sorry, we can only work on concrete data, that means closed sales."

When talking to my client he was very observant and noted that "if I was the second or third guy to go through a short sale in the neighborhood, this would be easier."

And I think he is right. The first closed short sale will be a comp for the second, and the first and second will be comps for the third.

Since the BPO has been completed, three other listings have gone on the market in the neighborhood as short sales. They are all listed within $5,000 of our list price and they still don't have any offers. It is pretty clear that if they get any offer, they will very likely be lower than the offer we have now.

But the bank won't consider that logic! They want "concrete data."

So is it impossible to be the first short sale in the neighborhood?

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Rainmaker
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Ken 360.609.0226 Vancouver Homes for Sales
Ken's Home Team at Keller Williams - Vancouver, WA

I have done several short sales and each time i make sure i give the BPO agent my data on the property, they will do their owne info but i get to plead my clients case.  I have also give the bank my date and have showed them what we have.  I would focus on pulling all the foreclosured properties in a 2 mile radius and give that as back up data and see if that helps your case

Jan 09, 2010 09:56 PM #1
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Rainmaker
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Donald Bradbury

e-PRO, Realtor - Bucks County PA - 610-952-3578
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