Proposed Rule Change for Short Sales in the Tucson MLS
December 20, 2008
Landed in my inbox today, a proposed rule change, if I understand the message correctly:
MLS Rule Change for Short Sales
Section 3.18- Short Sales:
As used in these rules, short sales are defined as a transaction where title transfers; where the sale price is insufficient to pay the total of all liens and costs of sale; and where the seller does not bring sufficient liquid assets to the closing to cure all deficiencies.
Participants are required to disclose potential short sales to other participants by stating the following in the Agent Only Remarks: ‘Potential Short Sale’.
Within two (2) business days of seller’s acceptance of written contract, the listing broker shall change the short sale listing’s status in MLS to ‘Active Contingent’, ‘Active CAPA’,’Pending’ or ‘Sold’, as is appropriate per MLS Status Definitions.
Disclosure of short sale shall not be made in the Property Description, Marketing Remarks, or any other publicly viewable component of the MLS without the seller’s written permission to the listing broker.
What does that mean? It means that short sales will be harder for the public to identify, assuming most sellers won’t want their property stigmatized by being advertised as a short sale in the public remarks. I’ve got mixed feelings about this one. From the seller perspective, it may generate more activity for their home sale - but then there’s a large group of buyers who don’t want to touch short sales, so they get excited about a home, call me about it, and then I get to tell them it is a short sale.
The problem with short sales is that only a small percentage actually close, and they can take months to do so. Not every buyer can afford to wait like that.
What say you?
What Did They Pay For It?
December 12, 2008
It used to be a discussion mostly had with Sellers - why the amount they paid for it however many years ago doesn’t really impact the market value today. But now I find myself answering this question more and more for Buyers. And the same answer still applies - it doesn’t really matter what they paid for it, we’re trying to figure out market value now, not market value four years ago.
However. In our public record, in the same place I look up previous sales, it tells me the loans that have been taken out against the property, and when. So if someone bought a $200,000 house 2 years ago and financed 100% of that, then I know that the loan balance most likely hasn’t gone down all that much, and that if we’re making an offer on the property below $200,000, then we’re probably looking at a short sale situation.
Which still doesn’t make the property any more valuable. But it might make a seller more reluctant to sell if they don’t really have to.
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