You really have to do your homework with regard to the price you offer. If you want the Lender to take your offer serious the offer must net them in the range of 80% to 88% of the current market value. Keep in mind that is their NET. They will be covering the closing costs in most cases. I have had 100% of all short sales I have presented to a lender accepted. If you come in too low, you will waste a lot of time waiting for them to refuse your offer. Some times they don't even counter -- they just won't consider it and never tell you.
You should employ the services of a good Buyer's Agent in your area -- look for one with Short Sale experience and ask about their successes.
Good Luck to you.
Pam, you need to remember that usually short sales are priced for a quick sale and they are usually below market value (which is why is you have a "regular" listing you hate to see short sales in the neighborhood). The initial agreement is between the buyer and the seller and then the bank approves it or not. If it is a "hot" property and going to have multiple offers than that will make a difference on what you offer. There is no set % to offer. You should know what the market is like where you are considering buying. Have your Realtor do a comparative market analyses for you on any property you are considering, they can also tell you as a benchmark the % to listing price a short sale went for. Good Luck to you.
Cynthia is correct, the listing agent are under pricing for the very purpose of creating a bidding war. That being said, if you find a home you really want. We can sometimes get a good price by offering to open escrow and then wait for bank approval. This is how I always approach short sales any way. When an listing agent sends all the offers they get into the bank, we might end up competing against an offer that won't even be valid once the bank says "yes." Bidding wars is NEVER anything we want to do....but if we offer to open escrow, put a small deposit into escrow (and we incur no costs against that deposit), I often find that listing agents will take less for the home because they know we are committed. That adds value.
Hope this helps!
It is not unusual for a bank to give up 5-10% off fair market value in a short sale. With that said is the property already priced below fair market value? is it priced higher than fair market value? It is not unusual for a short sale to be priced aggressively to get multiple offers immediately. If you just unilateraly say ill offer 15% less you may be missing out on good properties you may have paid more for. It is a good idea to work with an agent who has experience in short sales as well as negotiating real estate
It really depends on how the listing price is in comparison to the market value and how much the property is short by.
I have seen listing price to be either so high or so low that a percentage jujst won't work
Short sales are tricky and they have a lot of variables, make sure you are being properly represented.
If the price is higher than $600k, you can probably negotiate, because there isn't much probability of multiple offers - unless the price is more than 20% less than nearby non-distressed listings. Your agent should know by looking, if a property is "priced to sell".
The thing to remember about short sales is the seller must demonstrate "financial hardship" to the bank to be able to qualify for a short sale and must agree to the sale price arrived at between the buyer and seller.
The presence of both financial hardship and the bank's willingness to take a loss on the property normally leaves little room for negotiations. The bank's view could be to "wait and see" and hope they lose no money or get the property back in "foreclosure."
If you are looking for success...keep your offer real and close to the asking price for "short sales,"
I personally feel median and average-based information is great for trying to appear well informed at parties on a macro level, but in my opinion these measures are meaningless for targeted selling/purchasing and advising a client. Given that a â€œmedianâ€ is defined as â€œthe number separating the higher half of a sample from the lower halfâ€, this measure, as well as Average-based measures, have no regard for any of the specifics you may be searching for and can be skewed by segments of market activity that do not match your individual situation.
If you need useful and actionable information, identify a Realtor to work with and start drilling down into the specifics of your target criteria/area via the use of Comparative Market Analysis reports. This how you will be able to reach an informed offer amount for any home you seek.
Best Regards, Steve
It all depends on the asking price vs the market price. Bidding war can happen when the listing price is under priced at what the buyers consider as a great price for the house. If the listing price is high, nobody will be fighting over it, then you will over low.
Supply and Demand in a certain area at the moment you are looking the place generally determines the eventual pricing and there is no magic formula - Get a good Realtor who knows the in and out of your market, the market condition, the pricing strategies, with good reputation among other agents, then get his/her advise on how to go about making an offer. .
Marin Real Estate