Realtors Beware -- Short Sale Pricing

[Smiling JOe]

FAR?s Counsel Addresses Short Sale Issues

Increased short-sale transactions throughout Florida have prompted members to regularly ask the Florida Association of REALTORS? two legal questions. FAR?s General Counsel Randy Schwartz answers them below.

Q: If a real estate licensee lists a property at a below market price he knows the seller probably won?t accept, is the licensee in violation of Florida real estate license law?

A: Randy Schwartz: While a violation of the Florida real estate license law is a matter to be determined by the Florida Real Estate Commission, in my opinion, if a licensee lists a property for a price the licensee and the seller know is not acceptable, a case of misrepresentation and false advertisement can be made under Chapter 475.25(1) (c) Florida Statutes. It would not make any difference if the listing indicated that the selling price was subject to a third party lender or not; it is more a matter of advertising something that is known to not be acceptable.

Q: Is the seller in violation of any law if he states he would sell a property at a certain price even though he knew it would not actually sell at that price?

A: Randy Schwartz: I do not believe the seller would be violating any license law because Chapter 475, Florida Statutes, does not regulate the public. However, Chapter 817, Florida Statutes, might come into play for the licensee and a member of the public. Whether the seller could be held accountable for civil damages, due to his or her misrepresentation, would be completely determined by the individual facts of the case.

 

[AAbsolute]

So a party who wants an offer on their home to take to the bank for approval needs to list their home for the full value of encumbrances and then note that they will bring offers to the bank if they are below the Balance?

 

[Joe Mammy]

Q: If a real estate licensee lists a property at a below market price he knows the seller probably won?t accept, is the licensee in violation of Florida real estate license law?

My experiences with a handful of shorties this year is that the seller will accept anything if they think their lender will not chase them for a deficiency. And the listing agents are listing them at very attractive prices just to get offers. Then we explain to the buyers that closing at that price is usually a longshot- after researching the mortgage(s), lender(s) and seller's hardship situation.

A better question would be, "should a realtor list at a price that would not be accepted by the seller's lender?" But of course the realtor is not going to know what a lender granting a shortie will accept...

I have not had any shortie luck with Wells Fargo, Countrywide, IndyMac and Wachovia. Each was a hair pulling experience dealing with the loss mitigation departments.

 

[scooterbug44]

Good! Hopefully they can weed out the bad bait n switch realtors with those!

 

[Smiling JOe]

Joe Mammy, my experience has been different, as I have had sellers not accept low-ball offers, knowing that it was too far below what the lender would likely accept, because that would pull the listing off of the MLS as "active," and therefore pull it from most every real estate website.

I understand that there are some forthcoming changes to the MLS Rules for ECAR, which will allow short sales to remain "active" while under contract, waiting for the lender approval. Look for the changes in the VERY near future.

Your new question is a good one, but legally speaking, Randy Schwartz, doesn't make mention of it, because it is impossible to know that which a lender will not disclose. However, a seller does know what he or she will or will not accept. Prime example is the home which sold for $5million + in Four Mile Village which was listed at $10,001 as a short sale. Randy is saying that the listing agent (also thought to be the seller, but hidden through other companies), may be false advertising.

 

[AAbsolute]

I knew of at least (2) listings that were being advertised at a price far less than what the bank would accept in the situation. That is false advertising.

 

[YoungFT]

Always looking out for my friends in the SoWal Real Estate business, saw this on the web today and thought I would pass it along...

Realtors Turn to eLearning for Short Sale Training

PRLog (Press Release) ? Dec 02, 2008 ? Rochester, Mich,? ShortLeads.com LLC, ?a Rochester, Michigan-based provider of online realtor training?announced today the launch of the Short Sale Academy, an online course dedicated to training realtors on the short sale process.

?Industries ranging from health care, to manufacturing, to IT are all leveraging online training to provide flexibility to the person learning and to enhance the types of material that can be presented in the course,? said Lawrence Randazzo, Vice President of Curriculum Development at ShortLeads.com, ?we?re excited about being able to offer these benefits to realtors.?

The short sale training course offers all of the depth of an in-person seminar, with a number of unique benefits. Once a realtor purchases the course, they have access to the content whenever they need it. Even if they?ve already completed the course, realtors are able to go back and view individual lessons when they need to (often when they?re in the midst of closing a short sale opportunity).

The Short Sale Academy provides realtors the flexibility of learning on their own time, and also includes an iPod-friendly version that can be used to learn on-the-go. Both web and iPod versions of the course include eight lessons that walk realtors through the entire short sale process. The course also includes all of the documents and form templates that a realtor needs to complete a short sale, as well as useful links that contain up-to-date information.


www.ShortLeads.com

 

[SHELLY]

a Rochester, Michigan-based provider of online realtor training—announced today the launch of the Short Sale Academy, an online course dedicated to training realtors on the short sale process.

Here's the Short Sale Academy's Valedictorian:

[ame="http://www.youtube.com/watch?v=O8ii3TbVGZs"]YouTube - free short sale training, foreclosures investing, the secret[/ame]

I understand he's working toward a Second Major at Hamburger U.





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[dunefrog]

I knew of at least (2) listings that were being advertised at a price far less than what the bank would accept in the situation. That is false advertising.

I know of at least one situation like this that wasted about 2 months of my time. After the realtor listed the property as a short sale for 1,050,000, the bank said they couldn't take less than 1,200,000. Then when it came out of foreclosure as an REO, they put it back on the market for 950,000.

 

[Mango]

Here's the Short Sale Academy's Valedictorian:

http://www.youtube.com/watch?v=O8ii3TbVGZs

I understand he's working toward a Second Major at Hamburger U.





.

OMG, It's the Indiana Jones of Short sales! Touching King Midas' head in the morning and watching it turn to gold sent me over the edge. Then when the Vulcan Jeannie came out of the bottle....well, I really lost it. :funn:
So, that's "the secret", huh? (P.S. The Secret starts at around 4:00 min into it)