Home Buying in Shawano>Question Details

Ashley, Other/Just Looking in Shawano, WI

when a home is in short sale, how much lower should your offer be?

Asked by Ashley, Shawano, WI Mon Jan 12, 2009

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Shellie Mathe’s answer
Do not assume that Short Sale means a Deal. It only means that the home is selling for less that the seller owes on it - not necessarily less that it is worth. In the current market a number of home owners owe more than the market value of the home. Contact a reputable buyers agent in your area that can help you determine the value of the home based on market conditions and recent sales not on what is owed on the home.
2 votes Thank Flag Link Sun Feb 8, 2009
Ashley,

Keep in mind there are two approvals you need to have to be able to create a sales agreement. The seller and their bank both must approve of the offer. The seller can only qualify for "short sale" status when a financial hardship exists. With this said, they probably cannot afford to go much lower than their listed price. Plus, the bank will need to approve the final sale price since it will be less than the amount owed.

Our recommendation is to keep it real and base your offer on real facts that reflect the current market trend in this location.

Good luck
1 vote Thank Flag Link Sat Jan 17, 2009
Ashley you should not base your offer on an asking price. First of all a bank does not have to accept a short sale nor approve it. The unwritten guideline for a bank is to not take more than a 20% loss from what the person owes including nay costs of the short sale to the bank. When looking to make an offer you need to assess what the property is worth in todays market and offer 10% less. Now if there are alot of offers in you will want to go with your best offer up front and be closer to what todays value is. If you are the only bidder you can try going 20% lower and hope they meet you in the middle. A good buyer broke rwho is experienced in short sales and foreclosures will be able to assist. With short sales you must know they can take a long time and be very stressful. good luck with your search.
Web Reference: http://www.ScottSellsNH.com
1 vote Thank Flag Link Mon Jan 12, 2009
There is some misinformation in the answers here....we are CDPE Certified Distressed Property Experts which means essentially that we have taken additional training and continual training in short sales. IF you are dealing with a listing agent who knows and understands the short sale process...the "deal price" is already the list price. The listing agent should have a good idea of what will be acceptable to the lender...and there is no "fixed" answer for this since not all listing agents price short sales below market as they should. Rely on an agent with short sale experience and credentials or the transaction may not close.
0 votes Thank Flag Link Wed Feb 25, 2009
Ashley,
Many people think a short sale or foreclosure is a 'DEAL' when in fact that is not always the case. Why just look at short sales or foreclosures (which take MONTHS to close and are as is sales) when you can look at everything on the market?

Get a good buyers agent and work with them. The world is your oyster, it is a buyers market right now and interest rates are low. If you are a first time homeowner, you also have tax incentives.

Best wishes
0 votes Thank Flag Link Sun Feb 8, 2009
Ashley,
First I would recommend that you work with a Realtor that can give you specific information as it regards to this particular property and your local market.
But, essentially what the bank is going to do (with your offer or any other offers) is to get a 3rd party "price opinion or appraisal" to make sure that whatever offers they are considering, the property is being sold at a comparable market price.
In effect, they are going to want to make sure that the bank is losing as little as possible.
I have seen short sales sell at $10,000 below asking price, and I have seen them sell at or above asking price.
There is no "standard percentage".

Hope this helps. Good Luck
Web Reference: http://GoPackerUp.com
0 votes Thank Flag Link Mon Jan 12, 2009
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