Buyer Question – Why are Short Sales Listed at a Lower Price Than Will be Accepted by All Parties?

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Buyer Question – Why are Short Sales Listed at a Lower Price Than Will be Accepted by All Parties?

House was listed for $200k and that is what I put an offer in for. Then on presenting to the third party, they came back with a price almost $15k higher. Why list it at $200k to begin with. Is this only a come on?

Got this question here:  http://www.trulia.com/voices/Home_Buying/Why_are_short_sales_listed_at_a_lower_price_then_w-244763
Here’s my answer:

Great question. If $200K is less than what similar homes have recently sold for, then the seller and his agent were probably hoping to generate as many offers as possible as fast as possible. When they came back $15K higher in price, were they only dealing with your offer or were they making counter offers to a bunch of other buyers as well? Pricing a home below market is the same as auctioning off the property – the seller letting the market (willing and capable buyers) determine the value of the home. If they were making multiple counter offers, they may have been trying to get as much more from you as possible – maybe playing your offer against another higher, stronger, or more attractive offer. And yes, it does feel like a come on when homes are listed under market – you’d think that if you offered exactly what they were asking, you’d be making a winning offer, right?
If $200K was at or above where the price of recent comparable sold homes, it may be a natural up-tick in the market. Interest rates are super super low and some areas of the country are seeing price increases due to buyer demand. And, again, if there were mutliple offers, the seller may have been trying to get the most he could from you based on how he was playing the other offers.
Since this was a Short Sale listing, that adds another layer of possibities on the matter. The seller may have countered just to show the bank that the tried to get as much as possible for the home – even if you stick to your original offer. In any case – what ever you and the seller can agree to, the bank may or may not accept it. And it will take months to get a response from the bank.
Another possibility is that it is an approved Short Sale and, despite the list price, the seller knows that the bank will approve the Short Sale at $215K and is trying to get you to come up to what the bank wants. Make sense?
Thoughts?  Comments?  Questions?  Keep the conversation going on Facebook:  http://www.facebook.com/#!/WhatAgentsFearTellingYou?ref=ts

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