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Q: Why is the agent's listing price different from the price from RealtyTrac?
A: Once a property is listed with a real estate agent, the agent will set a listing price for the property. The listing price at this point is often close to full-market value.
The property is often listed with a real estate agent by the foreclosing lender sometime after the property becomes an REO (Real Estate Owned by the lender). If a property is in pre-foreclosure status (NOD, LIS) the owner can also decide to list the property with an agent, although the owner has a limited amount of time to sell based on the foreclosure timeline, which gives them typically 90-120 days before the property goes up for public auction.
The Amount (not to be confused with the estimated property value range) listed on RealtyTrac is usually based on the defaulted lien amount or the transfer value. The defaulted lien amount, or Balance, is what the foreclosing lender needs to break even. The transfer value, or Trans Value, is the amount paid for the property when it was purchased by the current owner (even if that owner happens to be the foreclosing lender).
Usually if an agent has listed a property, you can still submit an offer under the asking price (based on your knowledge of the break-even amount needed by the foreclosing lender) and get a good deal, but the final purchase price will probably be somewhere between the listing price and the break-even amount. The goal is always to get a good bargain, but you shouldn't necessarily expect to buy the property for just the amount owed.
Q: What does the dollar amount listed from RealtyTrac mean? Is this the asking price of the property? What other data does RealtyTrac provide to help determine the purchase price or value of a property?
A: The amount listed from RealtyTrac is usually based on the total amount of the loan in default. Called the Balance or Opening Bid on RealtyTrac, the loan amount is what the foreclosing lender needs to break even. If our data sources don't provide that amount, then we may use another amount such as the estimated value, last sales price or default amount (the amount the borrower is behind on his or her monthly payments).
This is not the asking price for the property; it's a starting place for you to begin your negotiations with the seller. The goal is to get a good bargain, but you shouldn't necessarily expect to buy the property for just the loan amount.
The loan amount gives a good estimate of what is needed to satisfy the lender. If you subtract this amount -- and any other liens against the property -- from the estimated market value of the property, you will have an idea of the potential bargain that could be realized with the property. This will also give you a solid foundation for making an offer to the seller. If the loan amount is more than the estimated value of the property, then you probably want to arrange a short sale (where the foreclosing lender agrees to let the homeowner in default sell the property for less than is owed) or simply submit a lower offer directly to the lender if the property is already bank owned (REO).
To evaluate the property further, you can view the Comparable Sales and Lien & Loan History reports from the Property Details or My RealtyTrac pages for properties. The comparable sales report provides a list of up to 15 properties that have sold recently in the neighborhood and an analusis of property values in the neighborhood. The liens and loans report provides a list of loans secured by the property and any tax liens placed on the property.
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