Home Buying in La Mirada>Question Details

Helen, Home Buyer in Los Angeles, CA

short-sale offer question

Asked by Helen, Los Angeles, CA Wed May 6, 2009

when you're putting in an offer for a short-sale and the prices of the homes nearby are about 10-15% higher, and you really really like the house, what is a good amount to offer? obviously above listing price, but do you offer $2-5k above or more like $10-20k more?

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Forget the listing prices. Get the recent sold comps.

Before you make an offer on that property, you need to do some research. You need to find out how many other liens are on the property, so that you'll have an idea of how to construct your offer appropriately. You shouldn't offer more than its current market value as determined by the comps, you'll need to do an inspection and appraisal, and you'll need to re-adjust your offer price accordingly if the property appraises for lower.

If I were you, I wouldn't attempt to handle a short-sale on my own. You need to work with a knowledgeable professional (an agent, real-estate attorney, investor, etc) who is experienced working with short-sales, because they aren't for the faint of heart. Additionally, negotiating and handling a short-sale is much more complex and involved than a traditional home sale. So, caveat emptor!
1 vote Thank Flag Link Wed May 6, 2009
Helen, take the advise of the real estate professionals who have commented here. There are many caveats to property sales of this type. Going it alone has many risks.

My studies have shown home listed prices are typically 30% above the market price. Homes that are sold show their last listing price to be within 6% of the accepted offer. These percentages are approximate for the areas of Florida I service.

The value of a home is based on ONE THING ONLY! What a capable buyer is willing to pay on that day. Put in an aggressive offer. After all, if you don't put in a offer the answer is always no.
Web Reference: http://www.mydunedin.com
2 votes Thank Flag Link Wed May 6, 2009
Look comps,bank can accept price less 10-20%, but be ready to pay for all inspection and some exstras on closing.
0 votes Thank Flag Link Tue Aug 10, 2010
Our agent gives us a listing of comps in the area for every home we look at. You should base your offer off those comps. Careful about making an offer that is too high. You may end up with the highest offer but the house still has to appraise for that amount in order to secure financing. Also, it depends on how much cash you have available for the down. Do you have an agent? If not, I'd interview a couple & find go with your gut. If you are not already working with an agent & are set on looking at short sales you should definitely enlist the help of an agent.
0 votes Thank Flag Link Mon Jul 20, 2009
Helen what does your agent advise? If you found a home and are writing up an offer you most likely have an agent.

If you submit and the offer doesn't get accepted until 3 months from now when prices have dropped are you willing to make up the difference in cash? There are so many things you must think of when you submit on a short sale, the best person to offer you advice would be your agent. If your agent can't offer you sound advice then you shouldn't be working with him/her.

Dyanna
0 votes Thank Flag Link Wed May 6, 2009
Thinking of Making an Offer on a Short Sale? What You Need to Know

Are you looking to buy a new home? Are you thinking that now's a great time to find bargains? That's true, but it pays to know a little about the seller's situation before you make an offer.

If a home is being sold for below what the current seller owes on the property—and the seller does not have other funds to make up the difference at closing—the sale is considered a short sale. Many more home owners are finding themselves in this situation due to a number of factors, including job losses, aggressive borrowing against their home in the days of easy credit, and declining home values in a slower real estate market.

A short sale is different from a foreclosure, which is when the seller's lender has taken title of the home and is selling it directly. Homeowners often try to accomplish a short sale in order to avoid foreclosure. But a short sale holds many potential pitfalls for buyers. Know the risks before you pursue a short-sale purchase.

You're a good candidate for a short-sale purchase if:

• You're very patient. Even after you come to agreement with the seller to buy a short-sale property, the seller’s lender (or lenders, if there is more than one mortgage) has to approve the sale before you can close. When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.

• Your financing is in order. Lenders like cash offers. But even if you can’t pay all cash for a short-sale property, it’s important to show you are well qualified and your financing is set. If you're preapproved, have a large down payment, and can close at any time, your offer will be viewed more favorably than that of a buyer who’s financing is less secure.

• You don’t have any contingencies. If you have a home to sell before you can close on the purchase of the short-sale property.

If you're serious about purchasing a short-sale property, it's important for you to have expert assistance.

• Experienced real estate attorney.
• A qualified real estate professional.*
• Title officer. It’s a good idea to have a title officer do an initial title search on a short-sale property to see all the liens attached to the property.

Some of the other risks faced by buyers of short-sale properties include:

• Potential for rejection. Lenders want to minimize their losses as much as possible.

• Bad terms. Even when a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, which may not be acceptable to some financially desperate sellers. In that case, the sellers may refuse to go through with the short sale. Lenders also can change any of the terms of the contract that you’ve already negotiated, which may not be agreeable to you.

• No repairs or repair credits in the contract
Web Reference: http://www.nvexit.info
0 votes Thank Flag Link Wed May 6, 2009
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