7 Biggest Mistakes Realtors Make While Doing Short Sales - Mistake #2

One of the top mistakes realtors make while handling short sales is not pricing the listing properly for the short sale situation.

Most of the time, we find realtors are listing short sale properties either too high, or too low. They somehow think that there is some mystery to choosing a listing price when a short sale is needed.

We often see agents who are unfamiliar with short sales list a property to cover the debt and sales expenses, and that price is higher than other similar properties. Obviously this gives the property very little, if any chance to sell.

An example is this post from an agent on an online realtor forum which in part said;

"I have had a house listed for about 8 months... The seller has moved out of state and she has been paying 2 mortgages for sometime now... The house is listed at $ 204,000. That is a great deal but unfortunately several other homes have started popping up around the neighborhood and selling for less than $ 190,000 and everyone buys those houses instead of my clients."

"The problem is she can not sell the house for less than $ 195,000. So I guess my question is, does anyone have any great marketing ideas where I can get more people in to see the house?"

When this agent says "she can not sell the house for less than $ 195,000" it is pretty obvious that number represents the debt and expenses. But rather than realize that this is a short sale waiting to happen, he is asking for a magical solution to sell the house at a higher price that the competitors.

If you list the property high enough to cover the debt and expenses, and that is above the current market value, you won't get any offers. You will never make the sale. Who is that helping? Actually it is hurting everyone involved, including the agent themselves. This is just wasting everyone's time.

The agent above doesn't seem to even be aware that short sales exist, and that's where his problem starts. So it is important that agents know and understand short sales so they can properly help their clients.

Some agent think that a short sale property can be listed at a low price just to try to get rid of it. But if you list the property at too low of a price, when you do get an offer, the offer will be so low that the lender isn't likely accept the offer. Again you're just wasting your time, and you're not helping the seller.

So the property needs to be listed at the right price, and with a subsequent pricing strategy that insures you will get an offer, and that the lender will accept the offer.

What is the right price?

The true value of the property in today's market. Not the value in yesterdays market. Not the value that the seller wishes it was worth. But simply the true value in today's market. If we list the property at its true value, we will get an offer before too long.

That's not so difficult is it?

Chris Badger of Strategic Loss Mitigation, along with being a real estate Broker, is known as one of the top experts in Short Sales.

For more information see his blog at The Short Sale Blog

For his complete Short Sale guide for agents go to "The Ultimate Short Sale Success System"

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