It sounds unbelievable, doesn't it? A 4-bedroom home in the Land Park / Curtis Park area of Sacramento for $75 a square foot? Hey, it's for sale. I hate to burst your bubble, but it's a farce. How do I know it's a farce? For starters, homes in that area sell in the upper $300's -- on average about $250 a square foot.
A bank is not going to accept a short sale offer at a price dramatically below the area's comparable sales. To deliberately price a home this low is terribly misleading to consumers and reflects poorly on the credibility of real estate professionals.
You may ask yourself why would an agent price a short sale like this? I don't know the agent in question but I would suspect it's because the agent hopes to draw multiple offers. The truth is that agent would get multiple offers if the home had been priced 10% below the comparable sales instead of 50% below market value. There is no need to try to trick buyers.
On the other hand, the agent may be trying to attract home buyers to whom he can sell other properties. That's known as a bait and switch tactic, I believe. The types of buyers attracted to this home will be buyers who want to pay 25 cents on the dollar or those who can't afford to pay market. Call me silly, but working with those buyers in this particular real estate market is like trying to teach my cat to walk on a leash. Ain't gonna happen, and it's waste of time.
If you see a home priced under market, ask your agent if that price is for real. On short sales, all offers are subject to bank approval, so agents can slap any old price tag on them that they want. But it doesn't mean anything.
The Short Sale Savior, by Elizabeth Weintraub, coming June 2009.
Photo: Big Stock Photo
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.
The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
Disclaimer: If this post contains a listing, information is deemed reliable as of the date it was written. After that date, the listing may be sold, listed by another brokerage, canceled, pending or taken temporarily off the market, and the price could change without notice. It could blow up, explode or vanish. To find out the present status of any listing, please go to elizabethweintraub.com.
I just had an agent, on a low priced home tell the seller it was worth only about $20,000. I listed it for $74,000 and it sold above list price. We need to be careful.
That's known as a bait and switch tactic
Kind of low for people who call themselve professionals to be using this to sell property. What we must overcome to keep our good name.
What a waste of time for everyone. Truly reflects poorly on Realtors
I would view it as an unethical bait and switch tactic, and I would report them to the board in a heartbeat. The pressure that places on the rest of us would be unacceptable.
I agree it's kind of slimy, but since the listing is subject to lender approval and the seller must agree to the list price, we can't make them be reasonable.
There's no home in our whole area that sells for that much per sq. ft. A little above $100 is a high price in Searcy AR.
Shoot Elizabeth - A couple of years ago, the land in Land Park was worth nearly $75.00 a square foot!
I hate to say it again, Elizabeth, but that tactic in this area is alive and well. But what I continue to deal with is buyer clients thinking that such asinine listings must be the deals/steals of the century! And whether it's the old bait-and-switch play, or trolling for buyers, or just ignorance, it's really a travesty on the entire industry.
Hi Barbara: Well, believe it or not, there ARE places in Sacramento where buyers can purchase home for $100 a square foot. Just not in Land Park or Curtis Park. The average square-foot cost in Sacramento proper for January for all properties was $116. For bank-owned homes, that average per-square-foot cost dropped to $103!
Hi Myrl: Well, tell your buyers not to get their knickers in a twist over this home, because it ain't gonna happen.
Hi Randy: I really don't see too many shenanigans in my immediate vicinity, but those things are happening in other neighborhoods. Just yesterday an agent put an REO pending after 1 day on market, which was priced at 50% of the trustee's deed and required approval from a specific lender. He also refused to accept backup offers, so you know whose offer was submitted. Unless the seller specifically asks for no backups, the agent must submit them, and this guy flat-out refused. It's a good thing it wasn't my buyer who wanted to submit an offer or I would be on the phone to that agent's managing broker.
Hi Elizabeth, Agreed that this is misleading, as well as deceptive. And, it's a waste of everyone's time also!
I wouldn't call it a waste of time, Sandy, but it does involve lengthy explanations to buyers as to why it's priced the way it is and makes our jobs even more difficult.
Hi Elizabeth,
I agree...this is frustrating for us as well as buyers - most buyers don't truly understand what a short sale is all about and it's our job to help them understand. It is tough to have to keep explaining to your buyers when they call excited that a listing in an area that is completely out of their price range has just been reduced to within their budget - that the listing agent is just teasing not only them, but also the sellers! Arrrrr!!
It is even more frustrating to hear that the listing agent hasn't even begun the paperwork with the bank and insists that they MUST wait for an offer to start the process!! What a shame that their seller is not getting the help that they deserve and that they will more than likely end up in foreclosure - shame on these crummy agents! :(