Happens almost this way every time.
I've done a ton of short sales lately.
Hope this helps!
If the list price is reasonable offer full price. Your agent can find out how long it has been on the market and where they are in the short sale process. They may be able to find out what the bank will take. Yes, sometimes it is over the list price. Dealing with a bank is totally different than dealing with an individual. There is no emotion just facts and figures.
All good answers. I think Martha has highlighted most of the points. It is strictly numbers...how do they (lender or lenders) lose the least amount of money. I strongly suggest you work with professional realtor who can do a market analysis and guide you through the process. Lenders are looking to get closer and closer to market value. If an agent lists a property low to get action, even a full price offer will not be accepted. The lender will do their own appraisal or market analysis too. You need to understand up front the time process and the realistic expectations.
Your agent should check to see how many loans are on the property. The more liens the less chances of closing. Even if there is only one loan...remember back when all the loans were being split and sold in various portfilios....well that means one loan could be owned by several investors now and each investor must agree. This is part of what takes the short sale negotiator so long. Also you want you agent to check and make sure the owner qualifies and has filed a hardship letter. A seller can't just sell short because their home is worth less than they owe. Their must be a hardship and they need to supply the supporting financial evidence that they don't have other sources to cover the payment.
If you have time contraints, then a short sale is not for you! Expect and average of 6 months. Some are less and some are more. Most lenders want a commitment from the Buyer of 120 days for an answer though 45 is the minimum they want to see on the addednum. This is just the first lender, then the process begins with each additional lien holder. Often by the time you get the last lien holder's agreement the first has expired and needs to be re-negotiatied.
Sit down and discuss the pros and pitfalls with your Realtor to see if Short Sales are an option for you. Then don't limit yourself to only short sales. Figure out what you want in a home and look at all your options. Sometimes the best value is an estate sale or just a really motivated seller who has equity in their home.
I feel an informed client makes the best decisions regarding their real estate needs. Let me know if I can be of assistance.
Broker Associate, GRI, SFR, NHS
Real Estate Consulting, Marketing & Sales
Prudential Tropical Realty
2539 Countryside Blvd #3 Clearwater, FL 33761
Please see my blog for tips on buying a short sale
I don't like my buiyers to pay that extra money to the attorney or some service but if the price is right (including the fee) what difference does it make? There are times when there is no choice if the buyer really wants the property.
All good answers here, but let me add that you want to make sure the seller isn't asking you to "contribute" to paying the short sale negotiator they hired. Make sure this is mentioned in a separate addendum or on the short sale addendum when you submit an offer.
David Barr, Broker Associate
It really depends on where they are in the short sale process. The bank may not even take what it is listed for on the market. The seller and his agent often lower the price until they get an offer and then the short sale process begins. I have seen on several short sales that it is listed for one price and the bank counters at 20% higher. The best offer price is one that is in line with what other similar properties in the are have sold for in recent months because that is what the bank is going to compare all offers to when responding. I hope that help would be glad to discus more or even to a market analysis for you if you would like me too. My office is on the beach and in fact just finished a walk on the beach doing a little business.
Have a great day
468 Mandalay Avenue
2011 Million Dollar Club
If you feel you must make an offer, stay within 5% of the asking price. The lien holder may take less but by doing that you wil complicating an already complex , long drawn out transaction and there is a really good chance that you will not get the property and will have wasted valuable time and gained nothing.
With today's interests rates as low as they are, each 1,000 will cost you lessthan $5 dollars more a month in your payment.
People are being penny wise and pound foolish. A home that sold for 200K, short selling for 159K with a tax value of 200K, and they are offering in the 140K's, they are losing a very good deal for about $50 or $100 per month, They wind up losing about $41,000 in value over this small amount per month.
Ask yourself, if you were the seller and lien holder, what would you do?
On a short sale the bank is already taking a loss. Trust you have a good Realtor. Base your offer on what similar properties sold in the area. It will probably be close to listed price. It has to be close to the BPO anyway, because that's what the banks will look at.
Best thing to do is to solicit the advise of a local agent that knows the market.