Foreclosure in Suwanee>Question Details

Dana,  in Suwanee, GA

How do I know the best offer to make on a short sale? The contracts always seem to be rejected.

Asked by Dana, Suwanee, GA Tue Jul 21, 2009

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Do not include any contingencies. Include a solid preapproval; preferably subject only to property appraisal, and include comps to support the offer.
0 votes Thank Flag Link Sun Aug 15, 2010
Deborah Madey, Real Estate Pro in Brick, NJ
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Sit down..talk to your a Real Short Sale Agent..and work together on the Deal ....this is a very important choice...we need to look over all the paperwork
0 votes Thank Flag Link Sun Aug 15, 2010
Foreclosures, HUD properties and short sales are all 3 different and not for amateurs. Seriously, if you intend to pursue these properties you seriously need an experienced full time agent working with you. And, if you already have an agent, listen to her advise. The other answers you received offer good advise - these homes are not being handed out like candy by the lenders. They expect to get fair market value or very close to it. Remember, alot of heads have already rolled because of irresponsible lending or investments that got the bank into this situation. The guy who see your offer package first BETTER be passing on a serious offer or his head could be next.
Right now, paying fair market value IS a great deal. Your buyer agent should be able to look at comps to give you an idea of where you need to be on your offer. Seriously, many of the list prices are very close, if not already at, fair market value at this time. Remember, we are several months into this and the banks aren't playing games with their pricing as far as I have seen.
0 votes Thank Flag Link Wed Jul 22, 2009
The lender expects to get FMV (fair market value) for the property. But in today's climate with values still dropping in many areas what constitutes FMV?

Ask your agent to submit a BPO (Broker's Price Opinion) with the short sale package. Many of us Rrealtors prepare a BPO or CMA (comparative market analysis) when listing a short sale property. That way we know when an offer comes along that's unrealistic and can't be supported. The BPO should be updated from the time the property was listed and reflect the market at the time you are making the offer.
0 votes Thank Flag Link Wed Jul 22, 2009
If you are low balling offers they are usaully rejected work with your buyers agent, much research is involved prior submitting any offer.

General public believes the myth that foreclosure or short sale you can low ball an offer you purchase a property. Believe in that system gets rejected offers.

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0 votes Thank Flag Link Tue Jul 21, 2009
Every lender has different rules they follow but there are guidelines we can use. I will base this on a price from 2005 or 2006 as a starting point.

If the market has dropped 20% from 2005 that would give you an approximate fair price for the market. This is driven by location and condition. The lender would order an Broker Price Opinion (BPO) to verify that number and typically would accept something in the range of 20% less than the current market (BPO) value. This is where the lender rules come in. Some can only accept an offer of 88% for a VA loan or 82% for an FHA loan. If it is a conventional loan then the rules are different and it could be less than that.

If you are offering less than 80% then they will likely reject it or hopefully counter offer something they will accept. If they are rejecting the offer without a counter then the price was just too low for them to accept and start negotiations. Everyone expects to end up in the middle between the asking price and the offering price. It doesn't always work that way but many times that is how we start out.

I have done several short sales successfully and it can be done. You have to realize there are lots of buyers out there looking for a deal and some are trying to steal but if you are willing to work on it you can get a good deal today. If I can help you please just email me back.

Hope this helps.

Jerry Robertson
0 votes Thank Flag Link Tue Jul 21, 2009
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