Yes they are negotiable. You have to remember that just because the seller accepts your offer doesn't mean the lender will approve it. The seller isn't getting anything at closing on a short sale, so they may accept an unreasonably low offer, only to have it rejected by the bank after you work on the transaction for 60-120 days. The lenders will have multiple evaluations and appraisals performed, in order to get the information they feel is necessary to make a good business decision. They will typically approve a transaction that is under market value, but my experience has been that the lender will not accept an offer that is more than 10-15% below the market value. You can ask for seller concessions, just remember tha the lender is the one actually paying the costs, by virtue of their payoff being that much lower at closing. They will accept offer with seller concessions if the price is right. If you have to have a seller concession because you can't afford a downpaymenbt, then the lender will likely shy away from your offer. They don't want the property tied down unless it is a strong offer.

Hello,

All listing prices on homes for sale are negotiable including short sales. Is the asking price in line with prices of similar homes in the area? Have you real estate agent prepare “Competitive Market Analysis” or CMA, on comparable properties, to help you come up with an educated opinion on the worth of the property.

Additional items to consider may be is the home in good condition – or will you have to spend a substantial amount of time and money making it the way you want it. In addition, how long has the home been on the market? If it’s been for sale for awhile, the seller may be more eager to accept a lower offer.

My experience is that short sale lenders may assist with buyers closing costs. Short lenders typically will not help with closing costs for investment property. My buyers ask for closing costs in their contracts for short sales because worst that can happen is the short sale bank counters it. You will not know what the short sale lender is willing to provide unless you ask.

Thanks,
Carol Perdew
Prudential California Realty
(209) 239-7979
Carol@PerdewHomes.com
http://www.CentralValleyHomes.com
DRE 985176

Lots of good answers and I don't notice an incorrect info. In many respects, the amount of your offer probably doesn't matter much one way or another. Unless it is ridiculously low, the seller is probably going to accept it, since the bank generally won't even consider a short sale unless the seller has an offer of some sort to present to the bank. And the bank doesn't much care what your offer is either. They will look at what the think they can get out of the property...either via short sale or foreclosure...and if they ever respond at all to your offer...they will respond with what they think they can get. If you aren't willing to do that, they'll take the property to foreclosure.

And don't take the listed price too seriously either. That may be the listing agent's best guess as to what the bank might take, but it also may be a ridiculously low price designed just to elicit an offer...so that the agent has SOMETHING to present to the bank to get the process going. If they price it at $300,000 and you offer $275,000...and the real value if $400,000...the bank is going to come back in the 400K range. You'll drop out, but then the listing agent can say in the MLS that they have an approved short sale price at $390,000...which makes it much easier to get buyers interested. You've waited 5 months and missed some good houses...and maybe spent some inspection money...and maybe done a good deed for the seller and listing agent. Hopefully they send you a "thank you" bottle of wine...but don't count on it.

And if you need/want to be in a house in the next 3 months, don't even consider a short sale. Six months? Don't bet on it working out within that time frame. It could...but don't bet on it.

Hey there,

Good question and the answer is yes, short sales are certainly negotiable. In Durango, especially in a short sale situation, you would hope the price is already decent in terms of its placement in a given price range as the seller is motivated and presumably the lienholder knows that they arent going to get a sale in the top of that price range. Still, as a Buyers' agent, we would be agressive in trying to get you the best deal possible so you'd be okay coming in 10% off the asking price (again, assuming the home is priced well to start - have your Realtor check the sold comparables for you). Most short sales these days have an asset manager in place that is mostly looking at certain percentages in regards to price opinions (similar to an apprasal) gathered as the short sale process progresses so you want to understand the market value of the home and work backwards from there if you are a buyer. In regards to the seller paying closing costs you can ask for them to participate in this. Your lender may only be able to use some much of this sort of 'Seller Concession', usually no more than 3% of the purchase price. Let us know if you need a savvy agent. Cheers.

Yes, short sale prices are negotiable. The way the process works is like this......upon receipt of your offer, pre-qualification letter, and seller's financial package, the lender will order several "Broker Price Opinions" from local realtors who are contracted to do this on behalf of the lender. They will respond to your offer based on the average price of the BPOs that they receive, so your price needs to be somewhat close to the market price for the property or it will be rejected. Be sure to have your agent come up with a reasonable price based on sold homes that are good comparables. As far as closing costs, as a general rule, you can request for seller (lender) to pay up to 3% of closing costs.

John Burke brings up a good point about USDA loans since our Durango area is categorized as rural, which is a requirement for this type of loan.

Hi Durango Resident,

Yes, you can ask the seller to pay closing costs but remember, it's the seller's lender that ends up covering your closing costs so keep that in mind when you start putting together your offer. If you go in with a really low offer and ask for seller concessions your offer may end up in the trash bin.

There is another option for your closing costs if you qualify for a no money down USDA mortgage. The USDA program will allow you to roll the closing costs into the loan as long as the appraised value supports it.

Please feel free to contact me for more information or help.

Bill provided excellant advise. Let me pile on a few comment to supplement his guidance.
it's a Short Sale, there exists only an illusion of rules. To be successful you must be flexible.

Your question implies you are going to submit a lower offer. That a good plan. However, if your offer is the maximum of your ability to pay, YOU ARE PLAYING IN THE WRONG GAME!

Do yourself and everyone else involved a favor and focus on foreclosures. There is way too much time and resources involved in the short sale process to have the wrong buyer. If, however, you do have room to improve your purchase price, then negotiate as agressively as possible. There are real deals to be found.

Best of success in finding your Durango home
AnnetteLawrence
Broker/associate
ReMax Realtec Group
Palm Harbor, Fl

In the world of "short sales" prices are negotiable but you'll likely find the seller to much more agreeable that tneir lender. In this game the seller will do anything to go to contract with a buyer.....then, negotiations start with the lender which bases theur pricing expectations on appraisals and BPO's.

With this said, so as not to waste your time consider making an offer that can be defended by recent similar comparison properties. To make an offer that is completely random will likely not enjoy the success you are seeking.

Best wishes,

Bill

Short sales are in a class of their own. The seller is still the homeowner but, because he's asking his mortgage holder to accept less than he owes, the bank is in on the whole deal. My answer would have to be "it depends". It depends on how far along the seller is in the short sale process--has the bank approved the asking price, etc. You certainly can make an offer and ask for closing costs, but keep in mind that the asking price is already below market value. I had a situation last year where one of my buyers made an offer a bit below asking price, and the bank came at over asking price! It was still under market, but...
Every lender/lien holder is different, so there's really no cookie-cutter answer.

Hi,

Yes, short sale prices are negotiable and yes, you can ask the seller to pay the closing costs. I see some seller credits on most short sale transactions.

Best regards,

Elva Wormley
C2 Financial Corporation

Yes. Make an offer. Unless the Listing says "pre-approved short sale price" or something like that, it is just the listing agent's idea of what the bank will accept. If it says "pre-approved short sale price" or something like that that means that offers have already been made and the bank has already responded with the price they are willing to accept.
If you are going to ask for buyer's closing costs, consider the fact that it is not the seller who is paying those costs, but the bank that is willing to accept the offer amount less the closing costs. The seller has no way to pay closing costs, or they wouldn't be in a short sale situation.
If you want the bank to accept an offer of $150,000 AND you want, for instance, $4500 of closing costs paid by the selling side, know that you are actually asking the bank to accept a net offer of $145,500.

Yes, short sale prices are negotiable. Have your agent provide you with comparable closed sales in order to give a good idea of the prevailing price in the area.

Yes, you can ask a seller to pay closing costs. The short sale bank will decide whether your offer, including a credit for closing costs, will provide an acceptable net to them. If so, your offer stands a chance of approval. Or…you could receive a counter offer from the bank.

Remember that the seller is selling the house but the seller’s lender will decide the terms that are acceptable. The lender is in charge.