Posted by Eric Woolhiser on April 20, 2006 at 15:43:32:
By my MLS board’s rules, pocket listings are allowed with disclosure and approval of the seller. My MLS is pedantic about it, in that we have the seller sign a form of the board’s making and we have to fax it into the board.
We can also have delayed listings, where we have the seller in an exclusive right to sell agreement, and a second agreement to enter the listing into MLS at a later date.
I often do delayed listings, as I do extensive photography work and virtual tours. I want it all to be complete before the market knows about the listing. I think it hurts market time to have a listing on the market for a couple of days while the REALTOR® finds the time to put in the pictures a couple of days later.
Also, our agents are not allowed to cancel listings. We have to get a cancelation form signed by both the seller and the broker, and it is faxed into MLS.
But why is it better for the seller to accept the lowest price in a short sale?
Well, you have to look at the transaction in total from the day that the seller bought it to the day the seller sells it.
Many people have re-financed their homes to bury credit card and other consumer debt. The credit report shows paid in full when the mortgage is discharged. If a consumer had burried 20K of credit cards into the house and later gets 40K of debt forgiveness, then he comes out ahead.
Why else to sellers often get a 1099 for the ammount of the forgiven debt?
What I will say, is that the seller should insist that the short sale package includes a promise from the bank that they will not later seek a deficiency judgement. If that can’t be acheived, then yes, the seller should try to get the highest price he can for the home, becuase post transaction he will be carrying negative equity. i.e. a judgement that has to be paid.