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Short sale manipulations?

Original post made by cp on Nov 5, 2011

I have a question to any realtor or mortgage broker that might be able to answer....this has been eating at me for 2 years.About 3 years ago I made an offer on a short sale of about 475,000 and I know there was at least one higher offer.We waited for about 3 months and nothing happened.The seller then took it off the market.This particular model is in a very popular neighborhood and is a single level that almost without exception sells in one weekend when one hits the market.Now about a year has gone by and it has not been put back on the market so I am fortunate to buy the same model elsewhere in the community.Now to further complicate the story 95 % of these are duets and there are only 3 or 4 that are the same floorplan but not attached.The original one I bid on was unattached and sells for a higher price.Now another unattached one goes on the market and somebody buys it for I believe 575,000.Now here is the problem...the original one I bid on that is unattched sells for 385,000.How is that possible?It would have easily sold for at least 500k in one weekend at the time.So why would the bank do that and lose all that money???So what if the buyers paid cash,which I have no idea.There were a lot of people with good credit and a big down payment that would have bought that in a heartbeat.Anybody have an answer???Thanks.

Comments (3)

Posted by Cholo, a resident of Livermore
on Nov 5, 2011 at 7:22 pm

the way i see it is some buyers change their minds...they get to thinkin' maybe if i buy in East Oakland, i'll get more for my money...for some reason, some potential buyers get way confused and then without much thought they decide to sit on their little nest egg...that's all i can think of to esplain this complex matter to you...hope it helps!


Posted by Not an economist, but, a resident of Laguna Oaks
on Nov 6, 2011 at 12:10 am

The banks start off thinking they can get more than 475. Months pass, and home values continue to decline. A year passes, and now knowing they'll never get the 475 that was bid the previous year, the bank begins to think that 375 looks like a pretty good deal.

Why didn't they just dump it at 475 a year earlier? Part of it, I think, is that they're afraid by taking what then was such a low bid that they'd be contributing to the further decline of home values, thus lessening the value of their other (usually multiple) holdings in the region. I think the same reasoning is behind why the banks are not simply flooding the market with all their foreclosed possessions. Instead, they're only putting up a few at auction at a time.


Posted by cp, a resident of another community
on Nov 6, 2011 at 10:21 am

The problem is when the house was sold for 385,000 the values had remained about the same.The identicle model that was also unattached sold for 575000 within 2 months of the sale and the attached models were still selling for 475,000 and up.It makes no sense.It is like someone knew someone at the bank and did something to push it through.100 % this would have sold in one weekend for a minimum of 500k based on comps.


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