Home Buying in Milwaukee>Question Details

Joey, Home Buyer in Wilson Park, Milwaukee...

If I like a short-sale home, how low can I go on an offer? It's been on the market for a while.

Asked by Joey, Wilson Park, Milwaukee, WI Mon Aug 29, 2011

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Joey...I agree with what has been said here, particularly with the comment of you being prequalified prior to submitting any offer. You need to know how much home you can afford prior to making any offer.

Following that, you do need to realize the bank is striving to sell the home for near to market value, and they have three values given to them....an as is value, a quick sale value, and an as repaired value. Depending on the property, they will determine which value best represents the property value.

Realize this process takes time, and a lot of it! Be careful not to lock yourself in for 90 days or more, during which time you do not have the ability to search for other homes......
0 votes Thank Flag Link Mon Aug 29, 2011
A word of caution on short sales, Three signatures (bank, seller, buyer) are required for short sales. Bank has no obligation to accept a contract between a buyer and the seller. We advise our clients to stay with bank-owned real estate (REO). Short sales usually go for way more than they list at anyway. We have witnessed banks reject multiple offers over list price and re-list at a higher amount. Meanwhile, your earnest money deposit is at risk and if you get tired of watching properties pass you by and pull-out..your deposit is gone. Stay with REO's, post-foreclosure, not pre-foreclosure.
0 votes Thank Flag Link Mon Aug 29, 2011
Hi Joey, I think the CMA has been covered. First and foremost, are you pre-approved for a loan from a lender? What is your current housing situation? Are you renting, and if so, are you month to month? The short sale purchase can take 90 days or even longer. I am certified and very experienced in short sales. Please call if you have any questions or if i can help you proceed with a purchase.
Tom Dorway RE/MAX Realty 100
0 votes Thank Flag Link Mon Aug 29, 2011
You can make an offer for any amount. However, it's in your best interests to have your Realtor do a CMA (competitive market analysis) to determine what the home is worth. Then pay no more than that amount. Probably offer less.

Recognize that the seller's lender has to approve the offer. And the lender will have a figure in mind, based primarily on a BPO (broker's price opinion), kind of like a CMA (though often not as accurate). So, while you can make an offer for any amount, the lender (probably based thousands of miles away, with a questionable figure from a BPO) has a figure in mind, too. You can hope that the BPO is either reasonably accurate, or that it's lower than the property's actual value.

So, have a Realtor do a CMA. Then make an offer no greater than the CMA . . . and probably somewhat less. (How much less? Ask the Realtor for advice. It's possible the suggestion will be in the range of 5%-10% less.) Again, you can make the offer as low as you want. But if you want a reasonable chance of getting the property, consider following the advice above.

Hope that helps.
0 votes Thank Flag Link Mon Aug 29, 2011
Don Tepper, Real Estate Pro in Fairfax, VA
The former answer was correct. Your agent should run a CMA. If you don't have one, I would be happy to run one for you. I do work out of Milwaukee. Also, your agent can also talk to the selling agent and usually find out how upside down the seller is. They are usually pretty good at pricing the short sales.

The seller will generally take any offer just to be able to make application for a short sale. After the seller has accepted the offer, then the back goes through the application and decides whether or not they will accept the offer. A short sale is rather a long sale.

If you need help, don't hesitate to contact me.

Nina Kraus
Coldwell Banker Residential Brokerage
Web Reference: http://www.kraushouses.com
0 votes Thank Flag Link Mon Aug 29, 2011
Hi Joey,
I'd be happy to check into this short sale home, set up a showing and advise you on what the next step is. Call or email so I can get the specifics from you. Cell: 262-893-6705 or email Lapuli@firstweber.com
0 votes Thank Flag Link Mon Aug 29, 2011
You should have your agent perform a Comparative Market Analysis(CMA) on the property you are interested in. This will not only give you a good idea of what the current market value for the property is; but will provide supporting documentation when you include your agents CMA with the offer.

In most short sale cases, the homeowner will accept any and all offers that come in, as they are not likely to see any of the sale proceeds. It is the bank that has the final approval for a short sale, and the more information and documentation the listing agent can provide the bank to support your offer the better chance you have.

The biggest thing to do is to make sure that your agent is experienced in short sales, and pray that the listing agent is short sale experienced as well!

Best of luck, let us know how it goes!!
0 votes Thank Flag Link Mon Aug 29, 2011
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