Home Buying in San Fernando>Question Details

Sofia, Home Buyer in San Fernando, CA

how much lower of an offer can I make on a short sale?

Asked by Sofia, San Fernando, CA Mon Nov 7, 2011

My husband and I are very interested in a home that is a short sale. We've been pre-approved and would like to make an offer. How low can we go in our offer?

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Erik Bottema’s answer
Sofia-

You can offer anything you want. Your realtor can show you recent sales and you can come up with an offer based on condition. It really depends on the property but again you can offer anything and go from there. The toughest part is getting the bank to accept it! I am an honest and down to earth realtor who will help you come up with a good offer on this house or another.

As a bonus, I will credit you up to 1% of the home price back through escrow on any home purchase of over 125,000! This could save you thousands!
Call or text me anytime...

Thanks,
Erik Bottema, Realtor http://www.SoCalCashbackRealty.com
Meridian Capital Real Estate
DRE #01895909, Member SRAR, NAR, CAR

Cell: (818) 426-1700
email: edbottema@gmail.com
PO Box 311, La Canada, CA 91012
0 votes Thank Flag Link Tue Nov 8, 2011
you can offer anything you want in any type of sale. we need to know what's your motivation and how bad do you really want that house. In this particular case, it would be important to know what the status in the short sale, we need to know if the bpo has been done and based on that we can decide how much to offer. if you need help to determinate the value of the home, I can help with that.

Thank you
Web Reference: http://jhoncordova.com
0 votes Thank Flag Link Tue Nov 8, 2011
There actually is a method to the madness. You REALLY need to scour over the comps with your agent though & your agent REALLY needs to be able to work with the listing agent for when that day comes when the bank sends out their appraiser.

If there's not going to be a tax consequence for the seller, the seller doesn't care what the house sells for & the bank will agree or not agree on a price. Look for the lowest possible comps where you can say "See this, this & this home are similar to our subject property & they sold for this much!"

Any more tips / tricks you would like, shoot me an email directly, I won't look back on this same Trulia posting for answers after mine.

EmilyKnell1@yahoo.com
562-430-3053 c
Realtor Since 1996
Main Street Realtors
Short Sale Expert!
0 votes Thank Flag Link Mon Nov 7, 2011
I agree with Anna. Have your agent do his/her homework and offer what the house is worth. It may be listed low to attract offers, or may be listed at a bank approved price....that may be un-realistically high. Your agent needs to find that out.

If its been at the listed price for a long time with no offers, (your agent can look up the listing history) then I would definitely offer less to get the ball rolling, but know that the bank may not be willing to approve that much of a loss, and you'll have to come up in your price, or walk away having lost valuable time, and possibly missed out on other homes.

It's a common misconception that you get a great deal on a short sale. There is simply no data to support that. You'll be expected to pay what the bank 's appraiser says the house is worth. If its a deal you're looking for, look at foreclosures...but, expect much competition.

Best of luck
0 votes Thank Flag Link Mon Nov 7, 2011
Sofia,
You can make any offer you would like. The Seller has to determine if your offer is worth accepting and sending to the 3rd Party Lender for their approval.

If it is an "Approved" short sale, the listing price is the price the Third Party Lender has agreed to. That means they have ordered multiple Price Opinions/Appraisals to determine market value and have agreed to accept that valuation. Therefore it shouldn't take more than 30-60 days to close.
However, if you come in with a "lesser" price it will start the process over again. The 3rd Party Lender will once again have to order Price Opinions/Appraisals to determine value. They may negotiate down from that value, but it is their (and Seller's) decision. It could take 1-3 months for you to find out if they will or will not accept your lower offer.

If it is NOT an "Approved" short sale and the Seller's accepts your offer (Subject to 3rd Party Lender approval) the process can take 3-6-months to find out if your offer will be accepted or countered. The more Liens/Loans against the property.... the longer it can take.
0 votes Thank Flag Link Mon Nov 7, 2011
Sofia:

Short sale lenders approve offers based on the fair market value of similar properties. That is why your offer should be based on the same value. The list price may be close the fair market value, or it may be way below. The only way to know for sure is to have your agent review comparable sales with you.

My experience, as a short sale negotiator, is that the short sale lender will be looking for an offer that is within 10% of the fair market value of the home. Now if we just had a crystal ball to figure out what the bank believes the fair market value to be, we would have many more approved short sales than we do today.

So go over the numbers with your agent and then make a reasonable offer. And if the bank counters, don't just cave in. I have seen deals where the bank counters and then still takes the original offer. As long as your offer is fair, stand by it. If you try to go low and the bank calls you out, then go up to what you know is a reasonable offer and hold there. Good luck and Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
SSG Pro®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
424-2HELP12 (424-243-5712)
myrealestateanswers@gmail.com
http://shel-lee.listingbook.com
0 votes Thank Flag Link Mon Nov 7, 2011
You can offer whatever you like, but in order to determine a fair offer review comps with your agent, recently sold similar properties in the immediate area, see what the data suggest and go from there; keep in mind that if a property is priced on target, or slightly below multiple offer may occur....
0 votes Thank Flag Link Mon Nov 7, 2011
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