If you remember, once an offer comes in on a property a BPO will be ordered for valuation purposes. WF DOES have strict ratios for what they are willing to accept off of that number, but regardless they will accept or decline a buyers offer from that BPO.
My guess is that the BPO was higher than what the offer came in at & WF did not budge. considering the home ended up selling for half the value that is almost always the case.
Short Sales are still a mean one to work with but I enjoy it for some reason.
- # of liens on property that got wiped out.
- Home is typically winterized once vacant. This drastically reduces the value of the home many times, and I have seen my fair sure of "improper" winterizations leading to pipes bursting etc...
- Financing can be different. What was once FHA approved might not be the case if my above comment holds true. On the flip side things like Fannie Mae's financing can be very attractive.
and in my experience Michael it does not really matter what was bid at the sheriff sale. Lenders don't approve short sales on what was bid but what they believe the fair market value is. I actually prefer working SS post foreclosure for many different reasons, but mainly they are incredibly easier to negotiate versus pre-foreclosure.
For example, our Non-recourse state foreclosure laws don't come into play until the auction, so as you can imagine people with big 1st's almost always run into issues with prom notes or cash at closing. I gain a lot more leverage once the sale happens because now the lender knows they have a time-frame.
I am actually more limited myself in the REO role, so it would be interesting to hear from an agent on their take.
REO's & Short Sales have their pros and cons. I tend to believe the greatest room for negotiation is in short sales with the downside of them taking longer.
If the comps support a 112k price then 89k probably not worth it. However, if your buyers agent (and most importantly the sellers agent) can show the comps closer to 89k you will have a chance.
You might also consider that the new figure might be the result of the winning bid at the Sheriff's sale. The homeowner may have been attempting a short sale when the property was sold at auction and now they might be attempting to redeem the foreclosure which doesn't require bank permission - a much easier and more likely transaction if the seller can find a buyer that agrees with the price.
Either way (short sale or redemption) you need more information about the situation and I agree with Steele that you need to determine on your own what the property is worth and make what YOU consider to be a fair offer.
Coldwell Banker Burnet
Licensed MN Broker
What you need to consider is what the house is actually worth on the market. Forget the $89,900 and forget the $112,000. If you are interested you need to get some kind of valuation to determine what would be a fair offer price. Then, should you decide to make an offer, you have hard facts to back you up.
As for waiting for it to be foreclosed... Yes, that is an option. You won't have to go through the iffy short sale situation (some 50% do not go through). And if there is more than one mortgage against the property and the first is doing the foreclosing you will not have to take into account any secondary loans on the house as they will be wiped off.
You may also want to determine just where the house is in the foreclosure process. Remember that in Minnesota most homeowners have a 6 month redemption period before the bank actually takes ownership. Depending on where they are at, this could be a long wait.
And another buyer could come in and try the short sale.
I would do the homework and then decide if you want to proceed or wait.
Steele V. Propp
You can always offer whatever you want, but in this case, there's probably a reason why it's listed for $112K. And you need to find your own Realtor who can represent you as a Buyer's Agent. He/she will be able to research the property and determine what "fair market value" is, and what a reasonable offer would be. Good luck!