I recently came across a SS listing that one of my buyer is interested in, but the listing history got me really concern and would like some input if you please. Here is the timeline of the listing and it really bothers me as to what is this LA is thinking.

03/15/2012 $125,000 to $115,000
03/14/2012 $130,000 to $125,000
03/08/2012 $149,000 to $130,000
03/06/2012 $169,000 to $149,000
02/27/2012 $169,000

In less than 30 days, the LA has dropped the listing 4 times at an unreasonable percentage. It this even ethical? I know my MLS will have a problem with this. I mean it's good she is trying to help the owner with the SS, but she could've just listed the property at $130K or $115K at the beginning, why list so high and why dropping so suspiciously? Should I report her to my MLS? Imagine if everyone starts doing this just to get an offer for their SS listing, what would happen to the local market? What do you think?

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  • Sellers drop listing prices, not agents (at least that is the ethical way).  It is highly likely that they have a foreclosure sale date in the very near future, and they are trying to get SOME offer right away in order to get the sale stopped and get the ball rolling with the lender.  It is a common tactic.  It is the old saying "price cures EVERYTHING".  If we have a listing that has a sale date in a few weeks, we'll suggest the SELLERS drop it very low to get an offer in right away to their lender.  It works well.

    • Missed Kyle's response, but he is right on.

  • We do this but typically bi-weekly. It is a great negotiating tool with the short sale lienholder. If a property was very close to trustee sale/foreclosures I would probably do weekly drops like this agent did.

    If anything, this strategy tells you more so that this agent knows what they're doing rather than not knowing what they're doing.

    We always research an agent before offering on their short sales by checking the MLS to see how many they've listed, closed and lost to foreclosure. I'm not a big fan of offering on short sales listed with inexperienced agents who intend to self-negotiate. This is typically a losing battle.
  • My best guess is that the bank hasn't set a price and the listing agent is trying to find a price the market will support. Additionally they are trying to make a case for why the bank should accept a price that gets offers. They will be able to argue with the bank why the lower price should be accepted because now they can point to the higher price and say "we tried higher and didn't get any offers until we lowered it to X price." It does seem to be a bit on the aggressive side for pricing, but they might be working on a really short foreclosure deadline as well. I don't see the MLS having an issue with this.

  • It looks to me like this realtor may be new.... and listening to too many people or It may be the owners controlling the prices---- **There seems to be an "air" of desperation  in the chronic lowering of value....... maybe the sale date is eminant..... have you looked in public records..... you may find it.......... just a few  thoughts....

    Hope this helps, Regards, Rose

  • It triggers a HOT SHEET getting on the list. (arm waving).

    • Good point Sam. I never thought of that one.

  • Report her to the mls for what? Lowering the price too much and too often? I don't see what they can do about that. This is a common short sale tactic that takes the proactive approach vs the reactive approach of just sitting and waiting for an offer. In my area that has been common practice for sometime now.

  • There is a train of thought that you list the home at a higher price and then keep dropping till you get an offer to try to prove to the investor that asking for a higher price will not work. Doing every week seems a little excessive to me. I would wait 2 weeks, but generally I try to list at a price that I know is a FMV and getting an offer is not too hard in my market.

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