Short sale buyer’s agents in Sacramento are wising up and asking more questions upfront about my listings before showing them to a buyer, but I still get the goofy questions about homes that are new to the market such as: Is this short sale approved by the bank? Some banks such as Wachovia and Wells Fargo are putting systems in place to preapprove the sales price but most banks do not. It takes an offer from a qualified buyer to get a response.

I’ve had only one bank this year tell me that the price on my Sacramento short sale wasn’t satisfactory, and that same bank came back 3 months later to accept an offer at that price. That bank, of course, was Bank of America.

Banks are accepting the short sale offers I submit. However, the offers I submit are generally much higher than my list price. As a Sacramento short sale agent, I realize that the market generally supports 2 prices: the list price and the expected offer price.

Simply put, banks want market value. Depending on the bank, however, banks may accept an offer that is priced somewhere in the range of 5% to 12% below market. What is market value? Market value is based on the comparable sales.

When I list a Sacramento short sale, I always pull the comparable sales, and I consider the pending sales, too, because pending sales are indicative of which way the market is moving and will become the sold comps at closing. Most of my short sales are listed about 10% below market value. This tactic brings multiple offers, which tends to push up the offers closer to market value. I advise my short sale sellers to accept the offer from the most qualified and dedicated buyer at a price that is closest to market value.

The problem isn’t whether the short sale bank will accept the price, it’s whether the price will appraise by the buyer’s lender. Sometimes, buyers write offers that are too high. In one instance, I had to tell a buyer’s agent that she may want to submit an addendum at a lower price. She had offered, let’s say, $350,000 on an Elk Grove short sale listing that was priced at $300,000. I suspected that the comparable sales would not support such a high price and we’d have a problem getting it appraised at that price. So, her buyer lowered the offer to $330,000.

Sure enough, the buyer’s appraisal came in at $329,000, and the buyer coughed up the $1,000 difference in cash.

Tip: Before you sign a purchase offer for a Sacramento short sale, ask your agent to give you the comparable sales for that neighborhood and to interpret that data for you. Because often, the listed price means nothing. Some agents ask their sellers to sign listing agreements at prices far less than market value, hoping that the short sale bank will give away that home for free, when the bank will do no such thing.

Lots of home buyers don’t understand this, and many can’t wrap their heads around the fact that some prices are plucked from thin air. They see a home on the market at a certain price and wrongly assume that they can buy that short sale at that price, when they can’t.

Photo: Big Stock Photo