Home Buying in California>Question Details

Alicia, Home Buyer in Monrovia, CA

Should I put an offer on short sale even though bank has rejected 5 offers close to asking price, Agent?

Asked by Alicia, Monrovia, CA Wed May 14, 2008

seems to think its a waste of time! Agent is very hesitant to approach short sales. Should I go ahead and put an offer knowing it might be rejected. I plan to offer full price.

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Hi Alicia..the problem is this... unless the listing agent has done their homework and set up the preforeclosure correctly, the askig price may be nothing other than a "fishing" price. Listings presented as such are difficult to get straight answers from. The first question to ask is whether or not the bank has given the listing agent a Rock Bottom price... Secondly, be sure that your offer is devoid of contingencies. Banks generally sell preforeclosures AS IS and without assistance toward closing costs.
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0 votes Thank Flag Link Thu May 15, 2008
If you are offering full asking price and not asking for any closing costs, your chances are good. But be prepared to wait for an answer. It can take several weeks before the bank to respond. How badly do you want that house? Are you willing to wait it out? If not, and you need to get into a home quickly, move on the homes that are not short sales.
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0 votes Thank Flag Link Thu May 15, 2008
Hi Alicia:

If you are willing to spend the time and effort to do it, then go ahead and make the offer, becauses if you don't make the offer, then it's an automatic loss.

However, I do agree with Michael, some of the agents are pricing houses Way, Way, Way below a reasonable price, and I suspect, trying to either get multiple offer and drive up the prices (which I have seen in Novato, Marin County) or just to get an offer in and go through the process of getting approved by the bank and delay the foreclosure.

Ask the listing agent if the bank has given them a net proceed they need to receive ini order to proceed when they were negotiating with the last five offers. That will give you a better indication on how much the bank will actually accept. However, if you are going for short sale, especially with the one that's priced low, be mentally prepared that there might not be much negotiation room on repairs and credits after you are in escrow (after the lender accepted your offer).

0 votes Thank Flag Link Thu May 15, 2008
Sylvia Barry,…, Real Estate Pro in Marin, CA
Alicia, Remember, asking price for a short sale has NOTHING to do with reality. We have certain price points here in Sonoma County which are either Short-Sales or REO's (bank owned). The Short-Sale folks price them way too low suggesting your ging to get a bargain price. The "Asking Price" could be hundreds of thousands off the loan amounts!! So going in at "Asking Price" isn't that big a deal! Our "Continue to Show" category has ballooned as these time wasting "Short-Sales" get reported as an opened escrow. Of all the short sales on the market 8% actually closed last month. So you've got about a 92% chance of NOT getting the house. You may wish to try it but don't order any moving vans!!
0 votes Thank Flag Link Thu May 15, 2008
If an agent is really good and/or experienced, before the short sale listing is activated, the agent would have already contacted the lender. The lender would then order a BPO (Broker's Price Opinion) wherein a licensed realtor/broker would have done a review of the property and the comps, and then recommend a price. The listing agent should get as close to the BPO price since that is what the Lender would expect the value of that home to be.

If, however, the listing agent lists it at less than the BPO price, the lender may/can be inclined to reject offers at less than asking. Since you plan to offer full price, you stand a good chance of getting your offer accepted.

On another end. the possible reason your agent is hesitant to submit an offer for a short sale is because of the length of time it takes to even get an acknowledgement from the bank after you submit your offer. Think 45 days waiting for a response.

HOWEVER, your buyer's agent works for you. If he/she doesn't want to write offers on your behalf on short sale properties, and can't/won't give you a satisfactory answer on why not, then you probably should get another agent who will work with and for you.

Good luck!
0 votes Thank Flag Link Thu May 15, 2008

You need to understand that a short sale approval can take anywhere from 3 -6 months with no guarentee your offer will be approved. Can you hold still for that long? In the mean time the interest rates could go up or down and so could values. What is your time worth? Do you feel this is the deal of a lifetime?
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0 votes Thank Flag Link Wed May 14, 2008
Pam Winterba…, Real Estate Pro in Danville, VA
Even though you are offering full price does not mean the bank will accept it. The sellers agent set the price with the owner in default, not the bank. What the sellers agent needs to do is to get an acceptable price from the bank(s) or at least the BPO (comps) that the bank is using to reject the offers. He then needs to negoiate and back up his list price with his comps. It is a lot of work on the sellers agent's part and if he is not persistent, he will never sell it. Your agent may be hesitant because the short sales take a lot longer than a normal sale or even a bank owned. To your direct question, sure it is worth putting in an offer, just be prepared to have it rejected.

Good Luck!
0 votes Thank Flag Link Wed May 14, 2008
Put in an offer for whatever you want. Your agent is profesionally obligated to present it. If they refuse, get yourself a new agent with more guts. Also, if your offer gets rejected and you still want the home, just submit a new one.
Eric - Century 21 Pro-Team - http://www.illinoislandandhomes.com
0 votes Thank Flag Link Wed May 14, 2008
Hi there Alicia. Do you really like this home? If you would like to work with an agent who is not afraid to mek offers on Short sales please let me know

Kind Regards
Michael Barron
First Team Real Estate
(714) 552-6817
0 votes Thank Flag Link Wed May 14, 2008
If the other 5 offers were close to asking, but yours will be for actual asking price, I'd say go for it. If you love the home, why not put in the offer? You have a good chance since you're offering full price, and you never know until you try.
0 votes Thank Flag Link Wed May 14, 2008
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