Too good to be true
We all remember the teaser mortgage rate ads offering below market interest rates and payments of just hundreds of dollars per month for homes selling for $300,000 and more. And we know where that got us.
So today as Charleston real estate consumers search Charleston MLS listings for sale and spot incredible bargains, are they also too good to be true.
Let's talk about how short sales are marketed.
Since the lender won't tell the owner or listing agent what price they will accept in a short sale, the objective when listing a short sale is to price it so that someone will write an offer to get the short sale process started. And since the seller isn't going to walk away with any proceeds from the sale, they don't care if the price is well below market, they just want to be rid of the property.
Unless the list price has been approved by the lender, the price is basically imaginary. A lender is just like a traditional home seller in that if they get an offer, they are going to want to know how close the price is to current market value. They'll then order Broker Price Opinions (BPO's) and appraisals to determine what price they will accept in a short sale.
How about real estate auctions.
Sometimes you'll see properties that will be auctioned off to the highest bidder. But again, unless there is a disclosed reserve which is the minimum amount the seller will accept, the list price is only a suggestion and not necessarily the price that you can actually buy the home for even if you are the highest bidder.
It works the same way for foreclosures at the courthouse steps, the bank will take the property back if the bid isn't high enough.
And speaking of foreclosures, while the price is low, it's a little more complicated than just writing a contract and buying the home in a month or so.
But having said that, good deals are available on all sorts of distressed properties. But sometimes, like the old saying, if it seems too good to be true, it probably is.