Property Q&A in North Port>Question Details

Sheila, Home Buyer in North Port, FL

i found a home i really liked on realtor.com .i called the realestate and inquired about it . it was advertised at 79,000 . i told her i would like

Asked by Sheila, North Port, FL Fri Jun 18, 2010

to give an offer of 77,000 and she told me that the mortgage co. was in the process of changing the price to 83,000 .i told her i was paying cash and want to give my offer but she said they won't accept it . what is going on ? { it is a short sale . }

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Sheila,

It sounds like the Realtor is telling you that the bank has a preapproval number and the bank is seeking that number. Still, you can submit an offer for a different amount. However, unless the property has been on the market for a while, the bank will most likely decline to negotiate. The bank, through their due diligence, has ascertained that 83K is solid number. Until the market rejects that number, it is unlikely they will negotiate. When a property has sat on the market without an interested buyer, the market has effectively "rejected" the property. Any seller, whether bank owned or privately owned, needs to listen to the market feedback and respond.

Still, if you want, you can submit an offer. It's unlikely that a bank will later reconsider your same offer. So, if your offer gains no attention, you may need to resubmit a new offer at a later time.
1 vote Thank Flag Link Fri Jun 18, 2010
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Jason,
Our short sale experience is that they almost all close. There are two stumbling blocks. Second Mortgage and Investment property. An investment property allmost always demands a note to be signed in order to close and some owners will not sign that note. Second mortgages are written down. We have one that the mortgage insurance company is demanding a note. That is a first for us and it is blocking the sale. The point is that it is more like 3/4 close in our area.

Debbie Albert, PA
Coldwell Banker Residential
Web Reference: http://www.ronanddebbie.net
1 vote Thank Flag Link Fri Jun 18, 2010
I have never had a short sale NOT close! What probably happened to you was that the Lender on the property wanted to net more than your offer would allow. Perhaps it is not the fault of the Realtor. Maybe a credit card lien or a tax lien hit the property. The lender has to pay off all secondary liens. The Realtor has to negotiate all secondary liens to attempt to get them paid off for the Seller. It is very difficult and time consuming. If you are purchasing a short sale property you should ask your Realtor if he/she has had any extended education or experience in closing short sales. If listing a property one should always ask that same question to any Realtor vying for the listing.
Faye Doyle, llc
GRI: Graduate Real Estate Institute
APR: Accredited Buyer’s Representative
CBRO: Certified Distressed Property Expert
RE/MAX Alliance Group
2000 Webber Street
Sarasota, FL 34239
Cell: 941-504-7496
Email: fayedoylellc@gmail.com
Website: http://www.fayedoyle.com
0 votes Thank Flag Link Fri Jun 18, 2010
Thumps up on last comment Debbie. My experience is also that short sales do close. It is with much cooperation and sometimes pain but they do close.
0 votes Thank Flag Link Fri Jun 18, 2010
Sheila - you are correct. Probably less than 1 in 5 short sales actually end up closing. If the bank has determined that the property is a sound value at $83,000 (at least for now) then that's what they will accept. Keep in mind that listing prices with short sales are most often enough listed with a super aggressive price to attract buyers. The bank has absolutely no say in what a seller lists the property for. Conversely they are under NO obligation to accept just any old price. Ever see a really great deal somewhere like in a newspaper and then after price there is an *asterisk*? You look down at the bottom of the ad and theres 5,000 small font words that you can hardly read and makes the so called deal not so great? This is how MOST short sales should be looked at. The reason most short sales don't go through (other than the lender taking too long to make a decision) is the overly aggressive listing prices that sellers put on their property. This is one reason I am not a big fan of short sales. They are misleading. They lure a buyer into thinking they can get property for "x" amount of dollars when in fact they will have to pay "y". That's why I instruct any buyer looking to buy to put an offer in based on the value of the house (based on comparable sales and the value the house has to them) as opposed to what a listing price is. Don't get caught up as most buyers do with the asking price. Don't have a chip on your shoulder that says I won't pay asking price. Sometimes a FULL price or OVER ASKING price offer is warranteed. Sometimes its NOT. Only way to know is to know the value of the property in the market and what the value is to you. Sellers do at time list properties under market value. Why cloud the sale by offering even less. I take it you are guilty of this as you offered $77K on a $79K list price. What did you see in the property that suggested it was worth $2K less. Why $2K?? Why not $4K, 3K? You can admitt it, anything but asking price right? :-)

I would suggest that you have an agent run a CMA on the property and get as close as you can to what the true value is based on comparables sales in the area. If after reviewing the CMA the $83,000 makes sense and is still a value to YOU then I would suggest paying that amount. If after a CMA review the value isn't there then I'd submitt your original offer anyways and continue to look at other properties. Good luck and let me know if there is anything else I can do for you.
0 votes Thank Flag Link Fri Jun 18, 2010
What probably happened is that the seller got an offer on the property. The buyer backed out because it took so long to get a response and even though the buyer backed out the seller often times comes back with a response to their offer. So, when the seller came back with a response then the Realtor knew what the seller was willing to accept and raised the price to reflect that. This is referred to as a "bank approved" price. Which means that is the price the bank will accept and if you go in lower, then the negotiations would have to start again.

Yes, you are correct, short sales do have a very low success rate.
0 votes Thank Flag Link Fri Jun 18, 2010
You know I may be off base here without more details but here it goes. In the Florida all offers have to be presented as well as counter offers. The fact that you want to pay cash may be an incentive to the bank especially if you will close quickly like before month end (but do not expect an answer that quickly on a short sale). Talk to the agent in more detail.

A BPO does not determine the price. The bank determines the price based on the BPO and other factors. Again I do not have all the facts. Only if the Realtor has dealt with a cash offer before similar to yours can they speak for bank.

Possibly call her back and ask her to submit and let the bank counter you or get your own Realtor and have them do research for you and determine where to go next. This Realtor could do a market analyis for you. Definitely get a Realtor who will be diligent in fact finding and write a solid offer for you. Naturally the owner of the property will have to sign and accept your offer. This may be where the Realtor would have the seller counter your offer at what the bank has stated they would take. I could go on and on with possible scenarios but it is best to deal with the listing agent as they do want to sell the property or a local agent working for you. Good luck!

Your Realtor will be better able to advise you about the value and mechanics of making your offer.
0 votes Thank Flag Link Fri Jun 18, 2010
this property was already on the market and had a buyer for 5 months, that finally backed out because the short sale took so long and i understand that 1 in 5 short sales actually go through is that correct ? thanks
0 votes Thank Flag Link Fri Jun 18, 2010
Sheila,

It sounds like Deborah is right on the money with her assumptions. My partner and I live and work in North Port so if you'd like help trying to find property in the area please give us a call or shoot over an email.

We are also certified to handle short sales and list many bank owned properties in the area.

Shannon Moore, Broker/Owner
Green Lion Realty
North Port/Port Charlotte
941-276-8142
twomoores19@comcast.net
0 votes Thank Flag Link Fri Jun 18, 2010
Sheila,
Part of the short sale process that a lender goes thru is a BPO (Broker Price Opinion). It is similar to an appraisal. It takes a look at the property and recent sold properties that are similar to it. This helps establish market value. Even after a contract is signed, the price can change based on the BPO. If the realtor is aware of the BPO, they need to change the price in the MLS system and state that the new price is the "bank approved price". This streamlines the short sale process.

Debbie Albert, PA
Coldwell Banker Residential
Web Reference: http://www.ronanddebbie.net
0 votes Thank Flag Link Fri Jun 18, 2010
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