Area Foreclosures

[Smiling JOe]

Realtors already know the price. It is Recorded in the Official Records and it's called a Mortgage. You might find it under the shortcut RM in the Court Clerks Website. You'll also find things like a Deed and Restrictive Covenants which you might want to study and disclose to the public if you're going to advertise in the MLS. What you're talking about is me going to a bank and telling them to settle a recorded mortgage and possibly a UCC for less than its legitimate securitized amount so you will know how to price a listing without being misleading.

Not true. Neither the mortgage nor the note, set the market price or the acceptable price by the lender in a short sale. I'm not about to do a short class on Short Sales on here tonight, but a short sale essentially means that the seller is selling for a price which will leave a deficiency, which the seller cannot pay, between the selling price and the amount owed on the note. Each lender is different regarding how much debt they will forgive, so NO, Realtors aren't privy to that information and thus they do not know the price which a lender will permit.

Regarding C&Rs, disclosure is not due at the time of the showing or advertising, so that is irrelevant. They are not required to be posted in order to enter a listing in the MLS.

A person making an offer on a short-sale listing is required to include a short sale disclosure to the contract, so disclosure is made that it will be contingent upon the lender approving it.

 

[Smiling JOe]

I think I understand now. Thanks for the time you put in.

So, Realtors don't have to disclose everything they know about the property and it's Title if it does not put the property in a light most condusive to gaining an offer.

No, you don't understand.

I'll give you one last example to clear it up.
Let's say the listing Realtor lists a normal property (not a short sale) at a price of $300,000. Mrs Seller tells the listing Realtor that she is willing to take $275,000 for the house.

The Listing Realtor has a customer, Mr Buyer, who he tells about the house. Mr Buyer asks the Realtor, "How much do you think Mrs Seller will take?"

The Realtor, acting as a Transaction Agency, cannot disclose that information, which is privileged, unless the seller states otherwise in writing. THAT is the type of disclosure which a Transaction Broker cannot disclose. ALL material facts which may affect the buyers purchasing decision, MUST be disclosed. If the Realtor knows that roof leaks, but the seller just had the ceiling freshly painted to cover the stain, but didn't repair the leak, that would be an example of a material fact which must be disclosed.

Hope that helps. You are not alone in your confusion. I'm sure many people have no clue. I think Agency Disclosure has always been confusing even to most Realtors.

BTW, a Realtor is no longer required to disclose if the Realtor knows that a suicide took place in the property. That was not always the case.

 

[Smiling JOe]

One final note on this thread for the evening:
In each of the three types of Agency in Florida, the first rule is:
[SIZE=-1]1. Dealing honestly and fairly

That even includes the NON-Representation Agency. That is a Florida Statute, not just some Realtor Code of Ethics, so it applies to all real estate agents in Florida. (Only one in four real estate agents in Florida are Realtors, which have a Code of Ethics which they must follow.)

I would guess that this ([/SIZE][SIZE=-1]1. Dealing honestly and fairly)[/SIZE][SIZE=-1] is why FL Assoc. of Realtors' lawyers believe that if a Realtor may be held accountable if he or she lists the property at a price less than what he or she knows the lender will accept. Prime example is the $5million (that is what the seller paid) short sale home which WAS listed at $10,001 in Four Mile Village.
[/SIZE]

 

[AAbsolute]

One final note on this thread for the evening:
In each of the three types of Agency in Florida, the first rule is:
[SIZE=-1]1. Dealing honestly and fairly[/SIZE]

[SIZE=-1]That even includes the NON-Representation Agency. That is a Florida Statute, not just some Realtor Code of Ethics, so it applies to all real estate agents in Florida. (Only one in four real estate agents in Florida are Realtors, which have a Code of Ethics which they must follow.)[/SIZE]

[SIZE=-1]I would guess that this ([/SIZE][SIZE=-1]1. Dealing honestly and fairly)[/SIZE][SIZE=-1] is why FL Assoc. of Realtors' lawyers believe that if a Realtor may be held accountable if he or she lists the property at a price less than what he or she knows the lender will accept. Prime example is the $5million (that is what the seller paid) short sale home which WAS listed at $10,001 in Four Mile Village. [/SIZE]

All right, let me be sure I understand this.....

I'm building a home and selling it for 1.4. My neighbor, who's a Realtor, advertises his listing in the MLS for 850 despite a mortgage payoff of 1.3. That Realtor has no clue if the bank will accept less than the full mortgage amount. It's o.k. with the Realtor's Association that he advertises the teaser price for his home?

 

[Smiling JOe]

I don't know how do say it differently than I've been saying it. ECAR doesn't tell the Realtor how to market the property, as long as the Realtor is within the rules of ECAR. Marketing the property includes pricing.

If an agent isn't dealing honestly and fairly, report him or her, with your proof, to the Florida Real Estate Commission.

You are totally missing the fact that in a short sale, the sales price will be less than the note payoff, and the lender, the seller, the Listing Agent, the Selling Agent, and the buyer are aware of this. (BTW, you don't pay off the mortgage, you pay off the "note.") The only catch is that the lenders haven't been disclosing the amount they are willing to accept, hence the need for the Short Sale Addendum to the Sales Contract, which states that the contract is contingent upon lender approval.

 

[Miss Critter]

All right, let me be sure I understand this.....

I'm building a home and selling it for 1.4. My neighbor, who's a Realtor, advertises his listing in the MLS for 850 despite a mortgage payoff of 1.3. That Realtor has no clue if the bank will accept less than the full mortgage amount. It's o.k. with the Realtor's Association that he advertises the teaser price for his home?

Maybe a better question to ask is "do I really want to build a home for 1.4 when the market price is at best 850?" No seller or Realtor pursues short sales for fun; they do it in an effort to get the property sold. Believe me, no one's leaving money on the table in these transactions.

 

[AAbsolute]

I don't know how do say it differently than I've been saying it. ECAR doesn't tell the Realtor how to market the property, as long as the Realtor is within the rules of ECAR. Marketing the property includes pricing.

If an agent isn't dealing honestly and fairly, report him or her, with your proof, to the Florida Real Estate Commission.

You are totally missing the fact that in a short sale, the sales price will be less than the note payoff, and the lender, the seller, the Listing Agent, the Selling Agent, and the buyer are aware of this. (BTW, you don't pay off the mortgage, you pay off the "note.") The only catch is that the lenders haven't been disclosing the amount they are willing to accept, hence the need for the Short Sale Addendum to the Sales Contract, which states that the contract is contingent upon lender approval.

And you completely missed my point.

If the Realtor has no pre-approved short payoff then they shouldn't advertise a ficticious price. They should be advertising the mortgage balance minus any reduction the Owner is willing to absorb by way of cash at closing or other provision.

 

[AAbsolute]

Maybe a better question to ask is "do I really want to build a home for 1.4 when the market price is at best 850?" No seller or Realtor pursues short sales for fun; they do it in an effort to get the property sold. Believe me, no one's leaving money on the table in these transactions.

If what you said were actual I would agree 100%. I'm talking about a Realtor advertising a property for less than it has ability to sell for. How is it legitimate to advertise a price that you have no ability to actual sell for?

 

[Smiling JOe]

And you completely missed my point.

If the Realtor has no pre-approved short payoff then they shouldn't advertise a ficticious price. They should be advertising the mortgage balance minus any reduction the Owner is willing to absorb by way of cash at closing or other provision.

If the seller could absorb the deficiency, it wouldn't be a short sale.

It sounds like you don't think sellers should be able to short sale their property, and that is an entirely different topic. Actually, this discussion is a bit off from the original thread topic, so let's take this thread back to "Area Foreclosures," and if you wish, start a new thread on short sales or pricing. You can do a multi-quote and post all of the pertinent posts from here, to that new thread.

 

[Smiling JOe]

If what you said were actual I would agree 100%. I'm talking about a Realtor advertising a property for less than it has ability to sell for. How is it legitimate to advertise a price that you have no ability to actual sell for?

According to FAR attorneys, if you can prove that the Realtor knowingly is pricing it less than the lender will accept, you may have a case. However, since the lenders haven't been telling Realtors their acceptable price, you would be lacking any evidence to support your claim.

*************
From NAR (National Assoc of Realtors):
What is a short sale? "A short sale is a sales transaction in which the seller's mortgage lender agrees to accept a payoff of less than the balance due on the loan," according to the California Association of REALTORS?.