Home Buying in Orlando>Question Details

John, Home Seller in Orlando, FL

Offer 190K for a short sale. Bank of America came back with counter of 207k? Should I just walk or how much should I counter offer?

Asked by John, Orlando, FL Thu Sep 2, 2010

Offer 190K for a short sale. Bank of America came back with counter of 207k? Should I just walk or how much should I counter offer? The recently sold home prices are around 190k.

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Answers

92
Ask your realtor to look at the comparable sale in the area. Be sure to consider the condition of the homes as they compare to the one you have the offer on. If the market value of the home matches or exceeds what B of A is asking for, then go for it. If it is not, you have two options. Ask your Reatlor and the lsiting agent to send comparbale sales to justify your offer. In this market of declining prices, the value of the home may have dropped since the BPO was done. Another possibility is that the realtor who did the BPO did not know the neighborhood and over valued the house.

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.
2 votes Thank Flag Link Tue Sep 14, 2010
what is the house worth to you? That's the only number you should bid up to.
1 vote Thank Flag Link Sun Oct 10, 2010
No don't give up keep sending your offer Have your realtor do a Current Market value and send that along with the offer
1 vote Thank Flag Link Fri Oct 8, 2010
If you want the house and the bank wants that amount, you should go forward and pay it. If you are not paying cash for the home, your lender will get an appraisal anyway and if it appraises lower than your offer, your agent can go back to the bank. I did this and we got the lower (appraised) price. Good luck!
1 vote Thank Flag Link Tue Sep 14, 2010
The LONGER the banks can draw out the short sale process the more money they earn. The government pays the bank to work on the files. If the bank can push the process to Foreclosure, then their Liability, your home, becomes a Liquid asset. The bank just increased thier lending power by 3x's the value of the house.
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!
1 vote Thank Flag Link Wed Sep 8, 2010
Pacita, do you also show them 96 a month over 30 years is $34,560?
1 vote Thank Flag Link Fri Sep 3, 2010
Hi John,

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.

Regards, Mark
1 vote Thank Flag Link Thu Sep 2, 2010
Depends on how bad do you want the property. And will your finances withstand the increase
0 votes Thank Flag Link Mon Oct 22, 2012
You need to assess what the home is worth in todays market and base your decision on that. If 207k is at or below market value, then that is what you should be paying. if the market value is under 207k, you should counter the bank and include comps with how you arrived at your value. the problme is some listing agents list the home stoo low to attract offers, banks often coounter or decline offers becuase of this. You just need to know if their counter is within reason.

please see my blog with info, advice and tips on buying a short sale.

http://www.trulia.com/blog/scott_godzyk/2010/06/how_to_get_a…
0 votes Thank Flag Link Mon Oct 11, 2010
The bank will try and get what it feels is fair market value for the home. It will most likely be loosing money at any price the home is short sold for, so it wants to get what is feels is fair. You have to decide if you (or your client) like the home and what it is worth to you. If you feel the 207 is a good and fair price raise your offer, if not you can hold out and see what happens or kill the deal. Once they counter the ball is in your court
Most offers to the banks are countered if they are too low, choices have to be made!
0 votes Thank Flag Link Mon Oct 11, 2010
Offer the current market value. Did you offer lower than the current price? If so, increase you offer ofcourse how bad you want the place. You can always play the wait and see. But it is more likely that you will meet in the middle with the bank to close this sale....

Sedat Celik, Realtor

http://www.easternbroward.com
http://www.fortlauderdalecoastalhome.com
0 votes Thank Flag Link Mon Oct 11, 2010
If you really like the condo..and thats what it really should be about. Then proceed with a small counter maybe just a few thousand less then the 207k, if recent solds are really around 190k the appraiser will kill the price of 207k and bring it down to where it should be..but still its a little risky. The payment differance between 190k to 207k will be around $100 a month (just approximating) also if you continue waiting rates can go up eventually I say buy it and just move in and enjoy the super 30 year fixed rates that are available now. But, if you are trying to flip this condo in several years you may want to wait and try your luck again. Much luck to you.
0 votes Thank Flag Link Sun Oct 10, 2010
agreed..often a short sale price, when determined by the bank, is based on a Broker's Price Opinion (BPO) or an actual appraisal. The actual market value is going to be what the bank wants..I've seen them hold out on a short sale for months waiting for a better offer..If you want the place bad enough, then go ahead and pay full or close to full price in order to get the place.. You don't know how many offers they already have and they're waiting for the best one..keep in mind this is lowest market you may ever again experience in your life time..get the house...the upside potential is higher than its ever been..
Web Reference: http://www.asasplaces.com
0 votes Thank Flag Link Sun Oct 10, 2010
John,

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.
To Whit,
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.
END
John
0 votes Thank Flag Link Sun Oct 10, 2010
Banks are trying to get as much as they can from their homes, to minimize their losses. Are you able to find out the balance of the mortgage (via tax records, or someone you may know at the bank)?

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.
0 votes Thank Flag Link Sun Oct 10, 2010
I always ask my buyers what is the value of the home in Their eyes? What is the most that you would be willing to pay for the home? What features does this home have compared to the other homes that have sold? Once you can determine the price that you would be willing to pay, counter that to the lender and let them know that this is your final offer and see what happens. At least you can confortably walk away if the bank declines your offer. Initial offers are very rarely accepted unless there is a bidding war or if the offer is full asking. If the home has been on the market for a while, the lender is more prone to work with you. You can suggest splitting the difference in half and compromise in hopes that the lender would agree.
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!
0 votes Thank Flag Link Sun Oct 10, 2010
Hi John
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.

Ed Bailey
0 votes Thank Flag Link Sat Oct 9, 2010
I repeat... if the home is worth $207,000 to YOU... buy it... if it is not.... DON'T BUY IT.
0 votes Thank Flag Link Sat Oct 9, 2010
Two factors at play here.

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!!
0 votes Thank Flag Link Sat Oct 9, 2010
I suggest having your real estate agent research homes that have sold recently and make sure the home will appraise at the price you are willing to pay. The question I always ask my buyers is, "Will you be disappointed if you don't get the home?" If the answer is yes then try to meet the bankin the middle with a counter of $198,500.
0 votes Thank Flag Link Thu Oct 7, 2010
Counter a minimal increase with comps. Like $191k max. Or pay for an appraisal if you want to make an offer. It would cost you $300-$400 and can save you $17,000 if you really like the place.
0 votes Thank Flag Link Wed Oct 6, 2010
Is the home worth $207,000 to YOU?
0 votes Thank Flag Link Wed Oct 6, 2010
You first need to have your agent verify what the net amount is to the lender. Also could there be more than 1 mortgage? Perhaps they need to re-negotiate with the 1st and 2nd mtgs, are there liens on the property such as Civil judgments, if so try and get a partial release, are there excessive unpaid HOA dues that can be negotiated,? After your agent reviews the HUD1 and if non of the above apply, I would do a CMA and if that supports the $190k submit that to BOA, and request that they order a new BPO (Broker's Price Opinion) As long as the offer is reasonable and the bank and buyer are not that far apart the lender will usually give it a second look with the proper documents that validate your position.
0 votes Thank Flag Link Wed Oct 6, 2010
were those homes foreclosed as well? whats the $ range for 1 mile ?
0 votes Thank Flag Link Tue Oct 5, 2010
John-

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.

Kate
0 votes Thank Flag Link Tue Oct 5, 2010
Are you working with an agent? I would not suggest that a buyer I was working with pay more than market value for a property unless the market has been depressed because of foreclosures and there is a good chance that in time the values would come back up...even then market value is the bench mark to what the value is today not tomorrow.

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.

Good Luck
0 votes Thank Flag Link Mon Oct 4, 2010
Counter B of A, the may come back to reality it happened to me twice this year. I submitted an offer to B of A of $400k B of A came back to me at $405k also asking for a 10k promissory note. I countered at $400k with zero promissory note and B of A agreed. The second time I submitted an offer for another property of $187k , B of A came back to me at $195k also asking for a 10k promissory note, I countered back at $195k with zero note and B of A agreed.
Good luck.
0 votes Thank Flag Link Mon Oct 4, 2010
Quite often there are other things wrapped into the price of a short sale which make the price higher such as unpaid HOA or Condo/Maintenance Fees, Mechanics liens, etc. Were there any of these added to the cost of the house? This is done after everything else has been evaluated and the appraised value is established by the BPO. Before you walk, if you really like the house and it doesn't have any major problems go back and ask more questions. Has your agent showed the bank representative the comparables that you have? What was the Bank's appraisal? If there are costs added are any of these negotiable with the bank? If the defaulted seller has PMI insurance then the bank had some insurance on the mortgage and wasn't out 100% of the loan. They naturally want to recoup as much as possible but if your agent continues to work and negotiate with the bank it may work out so don't give up until all avenues of communication have been closed. The bottom line is that you don't want to pay more for the house than it is worth - the bank should understand this position.
0 votes Thank Flag Link Sun Oct 3, 2010
Hi John,

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 (contact@fhlmail.com) if you have ANY questions.

Good luck!

Andrew & Elena Ollick
Amerivest Realty
Faith Home Loans
239-206-4500
0 votes Thank Flag Link Sun Oct 3, 2010
You can try to get them down more with a 195 offer..I will say this though, they are well aware of market conditions and home values, their counter may be their final counter..I can't hurt to try though, its not like they will get mad at you or anything, they just might not go lower..try it..
Web Reference: http://www.asasplaces.com
0 votes Thank Flag Link Sat Oct 2, 2010
The bank may have come back with a high number because of what is owed on the property. Some sellers bought during a high market or they owe so much back mortgage that the bank refuses to come down.

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).
Web Reference: http://www.RhondaHolt.com
0 votes Thank Flag Link Sat Oct 2, 2010
I am reading this as you are the buyer John.

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
Laura Myers
Keller Williams Arizona Realty
0 votes Thank Flag Link Sat Oct 2, 2010
Unless you believe that the benefits of walking away from your home is better than short selling your home, you should think twice about that move. Talk to your real estate lawyer and tax accountant and get a second opinion prior to making that your final decision.

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.

Best,

Drew Foma'i
First Team Estates - Newport Beach, CA
(949) 464-7634
Tweet me @RealDealwithDru
Follow me on Facebook @1000by2013
0 votes Thank Flag Link Sat Oct 2, 2010
I have a kind of similar situation:

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.
0 votes Thank Flag Link Wed Sep 29, 2010
Walk like a man
As fast as you can
0 votes Thank Flag Link Fri Sep 24, 2010
John, you could have your agent ask the listing agent when the last interior BPO was performed, and go from there. If it's been within the last 30 days, BoA may be countering you based upon what they've just been told by the BPO agent that it's worth.

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.
Web Reference: http://www.kimnoonan.com
0 votes Thank Flag Link Thu Sep 23, 2010
Hi.
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.
Good Luck.
0 votes Thank Flag Link Thu Sep 23, 2010
The lenders look at the bottom line so there maybe things you can do that will help that bottom line without offering a higher price. For Example: if it is customary for the buyer and seller to split the transfer tax you could offer to pay the full transfer tax. This will do two things; one increase the bottom line (the amount the lender gets to keep without increasing the price) and you can use it as a tax right off. Another would no seller assist. Unless lenders are given a full price offer they will always counter. There are a lot of factors that could affect an accepted price such as how many days has the property been on the market, does the lender feel it has had significant amount of exposure, has there been other offers that was not accepted, is there multiple offers, has the price been recently reduced? The bottom line for you is to decide on what you “walk away” price is and keep looking while negotiating.
0 votes Thank Flag Link Thu Sep 23, 2010
In general, you can counter Bank of America's counter offers. There is no expectation that you either take it or leave it. However, as Cesar pointed out, they have a number from an appraisal or a so called BPO which is done by a real estate agent. The lender will not sell much below what the house is worth. On the other hand the BPO often gets it wrong.
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.
Good Luck!
0 votes Thank Flag Link Thu Sep 23, 2010
Banks will not sell this property under what fair market value is , they usually get two broker price opinions and finally an appraisal to come up with the value, Common mistake for listing agents to under price the property thinking that it Might get approved.
I would talk with my selling agent to see if the 207k is what properties are going for .
0 votes Thank Flag Link Thu Sep 23, 2010
Sometimes with a bank, they just have to hit a certain number but they can't say it directly. What I have done is to actually ask them, "If I came closer to $193,000, would that work better for us?" You won't always get an answer but sometimes you will, surprisingly enough. If you don't get an answer, you can always just submit again. Just work out your own numbers and know what your bottom line is. If it is $190-- then resubmit that and walk if they don't agree. If it is $195, work your way up to it and see if you can't get the deal done. The key to success in short sales, is sticking with your numbers...remember that is what the bank is doing.
0 votes Thank Flag Link Thu Sep 23, 2010
Counter with your original offer. Marianne
0 votes Thank Flag Link Thu Sep 23, 2010
look at the other comps, could this one better? if you really like the house the difference is not that much a month on a the payment.
0 votes Thank Flag Link Thu Sep 23, 2010
How much is it worth to you? Unless you are paying cash, keep in mind that the lender you are using is only going to do financing on appraised value. If you want to pay more you are going to have to come up with more cash to close the gap between what the bank wants for the property and what your lender is willing to finance.
0 votes Thank Flag Link Wed Sep 22, 2010
Have your Realtor run a CMA. Once you know the value, based on what similar properties have sold for in the area, you can make a better educated decision as to what, if anything, you should counter. If you feel that your current offer is fair, then have your Realtor tell the listing agent you've made your "highest and best" offer on the property and have her/him give the listing agent your reasons for not increasing your offer ( I.E. sales of comps in the area, condition of property, etc.) The listing agent can take that back to B of A. They may back off and go with the amount you offered or they may say no. If you choose to counter, counter with the amount you are willing to pay for the home. If you feel that the home is worth more to you, then offer more. You get to determine what you pay for a house, not B of A. The question is how badly do you want the home?
0 votes Thank Flag Link Wed Sep 22, 2010
I have been working with Bank of America also, I know on an FHA loan the first three months it is listed in a short sale they need 88% of the appraised value as is, the next three months they need 86%, the next three months they need 84%. So if you find out what the house appraised for you will know what the bank has to have for the property. Hope this helps alittle.
0 votes Thank Flag Link Wed Sep 22, 2010
Hi John

Two questions:

* First, what is the property worth?
* Second, what is the property worth to you?

Your REALTOR® 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.

Good luck!


Marilyn Stark, REALTOR®
Century 21 Heritage Realty
Marilyn.Stark@gmail.com
http://MarilynStark.com
520-243-0060
0 votes Thank Flag Link Wed Sep 22, 2010
A Real Estate Agent may offer you a source of valuation using market data in order to assist with your offer as it relates to price. However, all short sales are subject to bank approval and the bank does have a right to counter your offer. It would be a disservice to you to blindly encourage you to move on or counter without knowing additional details.
Web Reference: http://www.iListForLess.com
0 votes Thank Flag Link Tue Sep 21, 2010
With short sales the bank ultimately decides what price they will be satisfied with on the property. You can argue it and counter offer back, but essentially it is up to them. I recommend speaking with a local (or your current) realtor to see what options you have.
Web Reference: http://www.teamhybridre.com
0 votes Thank Flag Link Tue Sep 21, 2010
What is the reason they are countering you? Are you asking for closing costs? I would stick with the price of 190k unless there are comps above this with the same features at this property.
0 votes Thank Flag Link Tue Sep 21, 2010
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