Home Buying in Flower Mound>Question Details

Erik Cole, Home Buyer in Flower Mound, TX

Should I counter the counter offer I got from WAMU on a Short Sale I am wanting to buy?

Asked by Erik Cole, Flower Mound, TX Tue Sep 23, 2008

I placed an offer on a WAMU short sale for the full MLS asking price of $399,000. Needless to say it tookmonths for the bank to finally assign someone to my offer and then order an appraisal. After the apprasial the bank came back to me with a counter offer of $450,000. I want the house for the orig asking price. Should I counter the bank's counter offer and if so for how much. I hear lots of bad things about WAMU and loss mitigation. Also does this possible govt buy out of forclosures have an affect on my office and their counter offer to me?

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5
Erik,

What is your feel?
Is this house THE one?
Are there other buyers involved?
How long has it been on the market?
Does your information support the appraisers number?
Are you willing to stick to $399,000 and run the risk of losing the property?

Our advice is that if you decide to counter with $399,000, you need to validate your number by providing information that supports your offer and brings the appraised value down to you offer price.

Good luck,
The "Eckler Team"
1 vote Thank Flag Link Tue Sep 23, 2008
Have you seen the appraisal?
Ask for a copy. Your Realtor can tell you what range the property would sell for normally. In Texas, if you had cash and sent an offer for cash at the listing price, the owner would have a difficult time refusing it, but the problem is most short-sale listings have wording that the offer is subject to bank approval.
Moreover, the listing agent may have listed the property without regard for its true market value. Many Realtors have taken this bad habit from highly distressed markets in Florida and California.
As pointed out, the listing Realtor should have gotten clearance from the bank for what price would be acceptable prior to listing it. Many don't do that. And some banks have gotten a reputation for dragging their feet on responding and responding with unrealistic counter-offers.
Research the original selling price of the house and the underlying liens on it to determine what the bank is likely owed. If you're asking to pay $5 for a $10 property, it is probably not the bank that is wrong. It could be the listing agent who underpriced it to begin with.
Negotiation is a fine art. You have to understand what the other side will settle for. No one can advise you what price to offer without an idea of the property's market value. At that point, don't expect to knock off more than a chunk of the bank's stake in the house. The cost of foreclosure and subsequent holding costs may be high, but you're trying to save them some of that cost by buying it before foreclosure. If they lose $30k on those costs, you can't expect them to sell it to you for $50k less than what they're owed.
Do they price to market?
Yes. If the market value of the house is $625k and they're owed $425k, you can expect a price between those two numbers. If the market value is $450 and they're owed $375, the range will shift down. The problem in other areas of the country is some values are below the loan balance(s). The banks have to weigh the costs compared to market value in those areas and decide if the loss is higher after foreclosing or selling beforehand in a short sale.
Web Reference: http://www.SumnerRealty.com
0 votes Thank Flag Link Wed Sep 24, 2008
Like mentioned earlier... If there are other offers on the table- it may be wise to accept what was counter-offered. The list price has very little significance in regards to short-sales- unless the price was set by the lender. Usually- the lender does not even consider acceping a short-sale until the short-sale candidate submits the application for short-sale; hardship letter, financial statements, HUD, adn accompanying offer to purchase.

If you are comfortable with the price- go for it. Just have an agent do a comprehensive CMA for you- and that should b enough to put you at ease.
0 votes Thank Flag Link Tue Sep 23, 2008
Erik.....offer what you think it's worth and what your realtor suggests. If they just got the appraisal and we're going into the winter months then they may get to hang on to it even longer. This is one problem I see with short sales lately. Agent puts some crazy low price on the house to draw offers. Offer gets made at close to the price, but then appraisal or BPO won't support the low number. That many months and I'd think they'd be close to foreclosure so you might just wait and make offer the day after the foreclosure sale.

I don't think anyone at this point can give you a straight answer on the govt buyout yet. They're just not that far along in the process yet.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Tue Sep 23, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Erik,
You should have been given paper work explaining that the short sale may not be completed and that the listed price may not be enough to cover all deficiencies. Usually when the home is listed the listed price is just a shot in the dark by the owner and realtor in trying to cover what the bank will take. This time they shot too low.
Do you want this house or or you buying money. The bank will not come down, they are not waiting to see your counter.
Margaret
0 votes Thank Flag Link Tue Sep 23, 2008
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