Hi Randy
I'd prefer not to mention the actual price publicly, but let's say it was less than the asking price:)

Ed,

Congrats on your purchase!!

Just a little update on my situation. Lender finally came back after 3 months and accepted our offer. Inspections this week, close escrow by the end of the month! Thanks for the help.

It is dependent on what the broker opinion of value is! A broker opinion of value is obtained by a seperate broker from the listing agent! Most banks will not sell them for much less than that, unless the buyers agent can provide evidence for a much lower offer! If the property is in need of repairs, appliances and upgrades they can sell for less than the broker's opinion of value. Ask the your agent if the bank has a broker's opinion of value this will help determine what offer you should make and will be able to purchase the home for.

Feel free to contact me with any questions or concerns!

Everyone below have given you great answer. It much depends on the current comps, lien holder situation and what the appraisal came in at. From the numbers you have us, it looks at first glance like the lowest comp might have something wrong with it ( fixer, bad location etc). Assuming the home you are looking at is in move in condition and the other two are similar to yours, I would say that yes it is possible that the bank will approve it. You actually have a better chance of getting a low bid accepted when there are two lienholders involved, because if the home forecloses the second lien holder gets nothing. However they are harder to get approved because often times the second lienholder is hesitant to take such a big hit. Does that make sense?

Something to keep in mind is, are there 2 deed of trusts on the property? If so, are they the same lender or not? Most issues with short sales not being approved are because the first and sencond lenders don't agree on a sales price.

To answer your question, first ask the listing agent where are at in the process. Have they started negotiating with the lender(s) yet. Try to feel around for a price where the bank may entertain an offer. Also, are the owners behind on their payments? Are they close to the trustee sale date?

Those are all important questions to ask to determine where you should come in with an offer.

If you need any other short sale/ bank owned negotiating tips or comparable figures for any prospective homes, feel free to reach me at: http://www.jameswehner.com

Good luck!

Bit more info. 2005 build (Pulte). Great cul-de-sac lot in West Wing. Only 3 other homes have sold in the area since March. One for $365K ($94/sqft), $539,900 ($142/sqft), and a third for $549,900 ($135/sqft).
My current bid has it around $116/sqft.

Thanks Fred. To give you an idea, a bid was placed for a little more than 25% less than the sale price in 2004. 3-4 years ago or in a different housing market, this would probably be absurd, but we all know Phoenix is hurting now; perhaps, only slightly less so than Vegas and Miami. I guess my question should be more specifically, is an even lower bid 'reasonable'?

Keep in mind that short sales are SUBJECT TO LENDER APPROVAL. This means the lender/investor that holds the lien on the property must approve the sale.

I have been survying REALTORS, TITLE COMPANIES, FINANCIAL INSTITUTIONS and other people to find out "What percentages of short sales are approved?". I have found that around 15% to 20% do get approved and 80% to 85% do not get approved. The main reason: price!

The lender usually will not let the home be sold for much less than it would appraise for even though they are facing additional costs if they foreclose on the home.

Freddie is right. You can call him, me or any other agent and we can give you our best opinion on what the property is worth. We can compare RECENT SALES, COMPETITION HOMES and HOMES CURRENTLY UNDER CONTRACT to determine what the property might be worth.

You can find my contact information on my website below:

http://www.TheKeysTeam.com

For a FREE list with pictures of foreclosed homes go to: http://www.623ForeclosedHomes.com

The Offer would depend on the comparable properties in the area, Recent sale prices and the condition of the home. That is a pretty tough one to answer with out knowing specific details. If you would like a specific answer feel free to call me and It will take about 15 minutes but I can get you a better answer. Freddie 623-695-0122