I am house hunting and signed up for a real estate service that has MLS listings on it. It is a pretty cool little service, you can see that houses mapped, search with a bunch of filters, etc. This service is for home buyers.
Now, on to my question. I’ve talked to a real estate agent about a couple listings on the service. The houses were listed at a good price. When I talked to the agent he said that the houses are short sales and that the asking price listed on the service is delibrately low and that the owners, the bank, probably wouldn’t sell at the listed price. The difference in listed price and the price the bank would probably sell at is non-trivial.
Is that legal? The houses that I looked at did not specify that they were short sales or any other notice that the listing price was way under what the acceptable price would be. If I made an offer at the listed price, and they refuse the offer and jack up the price, isn’t that deceptive advertising?
Probably, but you’re never going to win that battle. It’s like car dealers who make you sign a contract, but then feel free to break it on a whim - you’re just never going to be able to beat them at their own game.
The realtor’s interface for MLS is called MLX (ML eXchange) and will have more information than what you as a consumer can see on the publicly available MLS system. Realtors also have access to past listings and sold listings, which is how they do market analysis.
WRT to your question, I suppose it’s possible, but what would be the point? Presumably the bank is in the business of selling the house and not wasting everyone’s time?
Basically this is the situation. The house was listed at 219. I went and checked on the house, it was buyable. The real estate agent said that the lowest the bank would go is 270, ~50,000 more than the listing price. The agent also said that some houses are getting listed way below what the bank would accept for the house to get buyers looking at the houses (this applies to repos).
I am rather annoyed. I am not sure if I should be annoyed with the agent (who I will probably not be buying through) or with the bank for listing it so low.
It has always been my understanding that when someone offers something for sale a person has the right to purchase at that price, unless the offer is obviously a mistake, until the offer is withdrawn. Maybe real estate is different but I don’t see why.
Real estate person checking in. We list properties at the asking price of the seller. If the seller is the owner and wants to list it at below market, so be it.
After we get the contract, the bank has to step in and approve the sale. If the amount owned is more than the asking price, the bank has to approve the short sale. If they don’t the property will go into foreclosure.
These properties are often listed deliberately low, so a bidding war ensues and the bank can get top dollar and hopefully a quick sale.
Negotiating with the bank is one of the biggest pains in the butt of my job.
I’m assuming that you’re only talking about situations where you’re trying to get the bank to accept the sale proceeds in lieu of payment of the full mortgage balance.
As long as the banks get paid the full payoff price at closing, they don’t have to approve anything. Even if the loan is underwater, if the sellers bring extra funds to closing, the bank doesn’t have to approve anything.
On the other hand, if the property is overliened, it can be a challenge. I was dealing with a property with IRS, State Tax and multiple judgment liens on it, well in excess of the seller’s share of the price. Oddly enough, the IRS was the easiest to deal with.
Real Estate agent here, and I agree with both Annie-Xmas and Billdo, but I have little experience with short sales (I try to avoid those, although some agents specialize in them).
However, in all the contracts signed by sellers I have dealt with, they agree to pay the full commission if I bring a legitimate offer to the table, by a serious buyer, at essentially the same conditions as in the listing contract (price, terms, etc.). So if I brought a full-price offer from a buyer who has cash and no contingencies, I would be entitled to my commission. And believe me, I would get it if it went to court. The reasoning is that I have performed the task I have been hired for, and an unreasonable rejection by the seller is a breach of contract.
Of course, the contract between agent and bank might eliminate that clause with mutual agreement (if that is legal, and IANAL), and my experience is in only one state, and IANAL.
Someone in my town listed their house for half of what it was worth in order to get people to look at it. Apparently a ton of people showed up at the open house, and there were multiple offers, but the owner didn’t accept any of them because he wanted about 200K more than the house was listed for.
Technically this is illegal. The seller has to accept any contract with the asking price or over it. However, I’m sure something in the fine print could cause the contract to be cancelled (Oh, you want me to install a carbon monoxide detector? I’m not doing it).
You’re too mild - it’s a downright unethical, sleazy and contemptible way to do business.
Would a buyer’s agent countenance such shenanigans? I would think such an agent would have a duty to tell a potential buyer upfront that the seller looks like a sleazeball.