This practice by banks has become quite common over the last few months. Unfortunately this was probably not the case when you submitted your offer and both you and the Realtors could not have seen this comming. But it is common and if you love the house and the market value is close, you may want to carefully consider walking away and starting over. If you go for another short sale, you may find youself in the same place six months down the road and possibly at a higher interst rate.
Also remember, the avarage age of the asset manager your dealing with is 23.
Work with agents that know, and understand distressed properties. Look for someone that is CDPE certified!
What does your agent say?
How long has it been on the market and how long did you wait for the counter?
Is this an investment or a place you want to live?
Got an address so that I can check the comps on the MLS?
Answer these questions and I'll be glad to give a considered opinion.
please see my blog with info, advice and tips on buying a short sale.
Most offers to the banks are countered if they are too low, choices have to be made!
Sedat Celik, Realtor
While some suggest you figure out what it is worth to you, I must STRONGLY disagree, unless you just have tons of money to throw around.
John how about this, I will sell you $100 dollar bills all day for $120.00 each. HOW MANY DO YOU WANT????
OR $150.00 IF THAT IS WHAT THEY ARE WORTH TO YOU.
THIS IS WHAT THEY SUGGEST. DOES IT MAKE SENSE TO YOU????
THE value of a $100 bill is $100. You should not expect to pay less, nor should you want to pay more.
I would be analyzing recent sales, as you did. Remember short sales usually sell for less that recent prices, because of deferred maintenance and additional closing costs you may incur.
I would raise your offer to maybe 195k and thats it. Again, depends on comps - and how much you like the house.
Whatever you decide, just make sure you feel confortable with your decision. If you love the home, at least counter so that you know you tried. It's better to try then have regrets!
Two things you must (1) Get comps for the area and set your price to match the comps then send an add on to your existing offer by what ever form used in your state. Along with that paper work half way down the page make a note COPY OF THIS OFFER HAS BEEN SENT TO FDIC FOR REVIEW.
(2) Send a complete copy of offer to FDIC for their review.
Why FDIC they are the ones that control the banks. Back in the 1980s during the RTC savings and loan problem i sent a copy to them and about 6 mos later i got a call from a bank adutor asking me if my offer was still good i said yes and we got the property. Banks must put up matching fundsto the loan until the property is sold which can be a big loss.
First the listing agent didn't know what the bank would accept at the time of the listing and rather go low to just to get an offer in front of the bank. 2nd, the bank often orders a distressed BPO after the offer is presented to get a current valuation to assist their decision. The asking price on a short sale is irrelevant, the bank makes a calculation of value and often comes in higher than asking price after receipt of an offer. You need to do your own homework and see if it is worth 207k and if you choose to leave the deal the listing agent can use the 207k number as asking price and promote it as pre-accepted by bank for fast approval.
The banks don't negotiate emmotionally, and it is a go, no go decision on their part. If they want 207k, give them 207k and if the house doesnt appraise out for the mortgage you can get out of the deal. have your agent do a buyer CMA on the area and see if you can in your own head justify paying 207k. Don't focus on the 190k price, banks are pretty good at doing their homework. That said, this specific situation might have other factors at play. If the market is turning around in this area of FL maybe the comps you are using are too old. if you have seen all the active homes within a mile of that subject property, you and your agent should have a pretty good idea of if this house is better or worse than the closed comps.
Best of luck!!
This is all great advice from other agents. Also, you may want to have your agents submit the most recent comps that show property values are around 190k. The people reviewing your offer are most likely totally out of touch with what is going on in your marketplace. Do your best to prove to them WHY you are offering 190k and you will have a greater shot of getting it.
You can try to stick to your price and see what happens, if you are the only one making an offer right now on the property you might win. It is always worth the effort to stand strong, at least you know where they want the price if it doesn't work.
First I have to say that getting Bank of America to come back with an offer at all is sometimes a miracle in itself! And, to have them come back with an offer at is just 9% higher than your original offer amazes me even more.
There is no harm in coming back with a counter offer. Even if they accept it you can still change your mind as long as the contract has a 10 day inspection period that starts upon lender approval of the short sale. Ask your agent if this is how he structured the deal.
As long as the home will appraise for the price you agree upon, you are most likely getting a terrific deal so I would continue pushing for this house, especially if you want it. Ask your agent what the market value of the home is so you can gauge how much you should pay for it.
Bank of America seems to be working with you and offered a reasonable counter. There is absolutely no reason to think that there isn't some further room for negotiation.
Also, are you going to be financing this home? If so you should ask a mortgage broker to tell you exactly what the difference in your mortgage payment a small increase in purchase price will make. Besides, being a realtor, my wife and I own a mortgage brokerage, so I will be happy to help you out and guide you through this. Give me a call (239-206-4500) or email (email@example.com) if you have ANY questions.
Andrew & Elena Ollick
Faith Home Loans
I just had this same situation with another client and the client counter offered for months and the bank still said no. With the process of going back in to counter you might as well accept or walk away unless you have time on your hands.
If possible you can also submit solid comparables of homes sold in the area, with photos of the home and submit it with your counter offer (your agent should know this if they're experienced).
Many of my buyers are getting counter offers from banks these days. I'd say if the value to you is $190k then stick with that number. If this is supported by comparable sales then your Realtor should have no problem preparing the proper "fact sheet" and delivering to the listing agent this perspective so that the listing agent can take it back to the bank and get your $190k offer accepted.
For example...had one buyer offer at $435k, bank countered $470k, provided "fact sheet" to listing agent and the bank came down to $435k. Another buyer at $285k bank countered at $335k - listing agent "was fighting for the bank" and bank wouldn't take anything less than $335k. My buyer walked and house still sits.
Fight for the house you want and get the parties on your side with information they can't refuse and you'll get the deal.
Best of luck
Keller Williams Arizona Realty
John, if BofA countered, all their doing is negotiating with you. It's not final. But, if you have conflicting evidence that the market differs, provide it to the bank. Remember, you should have at least 3 relevant sales of similar type properties which have sold within the last 3 months, submit a counter-offer to BofA for their consideration.
First Team Estates - Newport Beach, CA
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I'm trying to short sale my home in Miami FL. It has Chinese Drywall and need to be repaired before is livable. I had an offer for 100K (Mortgage is $360,000.00) and BoFA made a counter offer for 175K plus a promissory note of 30K. Latest comparables (hoses in the same community with Chinese Drywall) were sold between 80-110K. I called the appraiser to ask how much he appraised the property to the Bank and he wouldn't say; it was confidential.
Should I walk away? If the bank forecloses it or I do a deed in lieu, the bank wont be able to sell it for more than the offers I'm getting. I don't want to have a deficiency judgement for a house which has a problem that its not my fault to begin with. BTW I don't have the money to fix the house (around $100K) to remove the chinese drywall.
If the most recent interior BPO is 30+ days out, or if you really believe the value is $190K and BoA is wrong with their number, have your agent tell the listing agent to request a fresh rush BPO (if the seller is on board with cooperating with you and your $190K).
I just had a BoA kick back $18,000 higher than the offer on the table - the house was in tragic condition so the BPO was horsedoody. We begged for a fresh BPO with interior photos and clear, compelling comps, got the new BPO out within a week. BoA then took the original offer plus $1500 towards some back taxes.
You never included the asking price for the property, and the bank loan balance. Also you have to take into consideration the market value of the property. Not what the owners paid for it, but selling price for similar properties, in the same neighborhood, within the last 3-6 month. If you really want it, and it factors in financially,
you should consider it, it is not the bargain that should determine the transaction, but how much you love the house, and can you afford it.
My advice is to send a counter offer with what is your limit and declare it your "Best and Final Offer". Ask the listing agent to send a message from you through Equator to the negotiator (can be the counter offer form) saying that you are willing to pay the price that represents the value of the property but after looking at the comparables the home is not worth more than your offer amount. The listing agent should also sent in Comparables from the past 3 to 6 months.
The lender can either reject or accept your offer or order a new BPO to find out if they are operating with the correct value.
I would talk with my selling agent to see if the 207k is what properties are going for .
* First, what is the property worth?
* Second, what is the property worth to you?
Your REALTORÂ® can help answer the first question. The second question is yours to decide. You can counter back to the bank, or you can look further.
Marilyn Stark, REALTORÂ®
Century 21 Heritage Realty