Short Sale, Foreclosure and Strategic Default


Monday, July 2, 2007

CA Real estate Pre-foreclosure

Researchers found that 10% of California homes on the MLS are in foreclosure. The Researchers considered a home to be in foreclosure if the listing Realtor designated the propoerty to be "short sale", "real estate owned", "reo" , or "in foreclosure" in the MLS data sheet.

I suspect the finding of 10% is low. Many Realtors are told by short sale trainers not designate a home as a "short sale" until responding to an offer with a counter offer.

I have been asked whether a a Realtor should "pre-disclose" the short sale. I thought it was a tough question. Ethically it seems like you should not make another Realtor jump through the hoop of making an offer before telling them you have to get bank approval.

However, ethically a Realtor also has a duty to the homeowner. Many Realtors are already avoiding short sales because many banks are taking to long to review the offers. By designating a listing as a "short sale", a Realtor may be preventing Real buyers from previewing their home.

CA Real Estate and Homes

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