If you find a listing that appears to be too good to be true, it's probably a short sale
Everyone is searching the Charleston MLS looking for a great deal. And some Charleston homes for sale are a great deal, there are both foreclosures and short sales and homes being offered by motivated sellers. But some short sales that you might find that appear to be too good to be true have bogus prices and they may as well offer the home for a dollar instead of the seemingly ridiculous price that it is listed at which won't be accepted by the lender anyway.
Disclosure, the home pictured at the left is not a short sale and is pictured for illustrative purposes only.
As I was reviewing the hot sheet in the Charleston MLS the other day, I noticed a home offered for sale that seemed to be at a much lower price than it should have been for the neighborhood. And sure enough it was a short sale being offered at what I figured was just about 50% off current market value.
Now, it's difficult enough to get 3rd party lender approval for a short sale anyway so why would the seller offer their home for sale at that low a price and why not just offer it for a dollar.
The answer is probably price discovery. You see, when you start the short sale process, the loss mitigation department at the lender won't say how much they will take for the home. You need a contract to submit along with all the other required paperwork in order to wait for the bank to respond. And they won't respond quickly anyway but an offer is at least a beginning to the process.
So anyway, back to the story, in this particular case, not only is the home being offered at a bogus price but the listing agent is indicating that the home will remain active in the Charleston MLS until acceptance by the bank and that happens to be against the rules of the Charleston MLS which all Charleston real estate agents were recently reminded about by the board.
So, buyers beware, when you see some homes that appear to be to good to be true, you can write an offer but if you want to know why you can't buy them at the price offered, it was probably a short sale.