As the market tightens consider making an offer that is fair as the national lenders are in tune of what is happening

Search for shortsales in Palm Beach County at http://www.LindaBassitt.com

Hi Jennifer
The balance owed is not as important it is what the current market value is. The lender knows that in foreclosure they will have to price based on market value with a percentage discount for "foreclosure stigma". Therefore they will base their acceptance on current market value as determined by a BPO.

To Steven, I think it is very important to know how much is owed, if only for gauging your own expectations. If someone owes 500,000 to 3 different banks on three different loans and theyre showing a list price of 200,000, chances are the banks aren't going to play along.

Short Sales don't usually get granted until there is an official offer on the table. Banks don't just sit around and say "ok you owe us 500k but we'd be willing to take 300k and call it even", you actually have to bring them an offer for 300k and then they consider it. Since the listing says 'short sale' what probably is happening is that the owners went to the banks and said 'hey can we do a short sale?' and then the bank said 'try it if you want' but numbers arent actually preapproved.

Great answers from all, but I'll add my .02 as far as what % you can negotiate.

It depends on several things:

If the mortage holder is freddie mac or fannie mae and what % of their loans are considered underperforming.

What this means to you, is that, IF they have a large share of 'underperfoming loans' then the Feds will NOT loan them more money to make NEW loans, which is where they make their money. THAT IS what you need to know to get a better deal ;-)

Moving forward, having an agent that knows these little rules is very important if you want to get the absolute best price. You will need to know the motivation of the seller, regardless of whether they are a bank or what, there is always a motivating factor to sell (or NOT).

An experienced agent in this wacky world can be invaluable to you. Then again, as I have advised many people, looking at all of your options is not a bad idea. People always assume that foreclosures are a great deal, not always.

Best of luck!

Paula Bean
Orlando, FL

Current market condition should reflect in your offer price. If the home has been sitting for a while that would certainly lower the offer price as well. Perhaps your agent can do a Market Analysis of the subject property so you can judge a fair price. As far as what is owed by the seller? Obviously, they owed too much. At issue is whether the selling and the listing agent, and of course, you, can persever to 'get it done' within your time frame.
I recently had one where the seller had 5 debts and judgements against her. That was a big surprize for all of us. None the less, we all had patience and got it closed
They are all different and your patience is what matters here..

Jennifer, you will want to work with a qualified short sale Realtor who will be in a position to advise you on purchasing a home listed as a short sale. They need to know the ins and outs of short sales so they can effectively communicate with the Listing agent. Unfortunately, there isn't a general rule of thumb in negotiating with short sales. The negotiations all come down to what the seller's lender is willing to accept as an offer and this can vary from lender to lender. The sellers lender will be looking at the fair market value for the home and will accept the sales offer based on that. Short sales can afford a wonderful buying opportunity to buyers; just make sure you have a Realtor representing you who knows the process.

Jennifer, Laarni really gave you some great advice. In addition most short sales that take place the Lender who will accept less than what is owed on the house will only accept an offer with an approval from a Mortgage Lender along with your offer.

There is no rule of thumb on the percentage discount on short sale. Your offer should still be based on the market value and the listing agent should be able to "persuade" the lender if your offer makes sense. As for how much is currently owed, the listing agent should be forthcoming with that info or you own agent can also avail you of this info