Home Buying in 92653>Question Details

Pam, Home Buyer in Mission Viejo, CA

what % off of the list price do you typicalley offer on a short sale?

Asked by Pam, Mission Viejo, CA Sat Jan 24, 2009

short sales

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15
Hello Pam,

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.
2 votes Thank Flag Link Sat Jan 24, 2009
Obviously Gene you must work in a different market than the rest of us - 50% - they would laugh at that here!

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.
1 vote Thank Flag Link Sun Aug 1, 2010
There isn't a % off the list price to shot for. The bank is the one you need to deal with and they know what they will except. Your agent and you do a market evaluation on the property, then you decide how much you are willing to pay and put an offer in on the property lower than that figure. Right now, I tell my clients put your best offer in, no games. The bank on a short sale may not get back to you for 30 days and then ask you to up your offer and wait again. Going with your best offer and stating to the bank at the begining saves you time.
1 vote Thank Flag Link Fri Mar 6, 2009
Hi Pam,

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!

Karen
1 vote Thank Flag Link Sat Jan 24, 2009
Pam- There is so many variables that go into an offer. First off is determining fair market value of the property, the competition that may be present for the property, how much you like the property and what you are willing to pay for it. There is no easy answer.

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
0 votes Thank Flag Link Tue Sep 14, 2010
At least 15% lower than the price of the property will sell for.
Web Reference: http://www.mikesaidire.com
0 votes Thank Flag Link Tue Sep 7, 2010
Jay, you should probably delete your references to our old nemesis "Gene", as it seems that Trulia has wisely elected to delete his extremely irrelevant and totally inaccurate posts - along with "Gene", himself.

Good riddance.
Web Reference: http://tr.im/FreeMLSSearch
0 votes Thank Flag Link Thu Aug 5, 2010
I don't think it can ben answered by a percentage.

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

Sylvia
0 votes Thank Flag Link Sun Aug 1, 2010
Sylvia Barry,…, Real Estate Pro in Marin, CA
MVP'08
Contact
There is no standard % and typically short sale listings are already listed below market price, at least they are here in Tucson. FYI, even at full listing price we dont know if the bank/mortgage holder will accept it anyways. Look at the comps, SOLD comps +-300 sq ft that are similar in the subdivision and see how it compares and then make an offer based on that. Anyone who uses a standard % for all offers is not doing you a true service.

Good luck.
0 votes Thank Flag Link Sun Aug 1, 2010
Take in consideration the actual comparables for similar homes in the neighborhood . . after adjusting for repairs around 5% reduction from that I believe you will be getting a great deal.
Short sales are tricky and they have a lot of variables, make sure you are being properly represented.
0 votes Thank Flag Link Thu Jul 29, 2010
While all the answers below have truths to them, I didn't notice one factor mentioned that I would consider very important. The price range the house you want, happens to be within. If the list price is more than competitive, and it's less than $400k, there are probably going to be multiple offers, and it likely end up selling for over list price.

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".
Web Reference: http://BobPhillips.net
0 votes Thank Flag Link Fri Mar 6, 2009
Pam,

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,"
0 votes Thank Flag Link Sun Jan 25, 2009
Hi Pam, for ANY property a Comparative Market Analysis gives you the best representation of market activity/direction - for the specific property details you search on.

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 “median” is defined as “the number separating the higher half of a sample from the lower half”, 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
0 votes Thank Flag Link Sat Jan 24, 2009
Hi Pam:

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. .

Best,
Sylvia Barry
Marin Real Estate
0 votes Thank Flag Link Sat Jan 24, 2009
Sylvia Barry,…, Real Estate Pro in Marin, CA
MVP'08
Contact
Typically they sell for over the asking price. On occasion you'll see a sale under asking price but not often. It's the same with REO's (bank owned properties). You'll find that these properties are aggressively priced in relation to their actual market value. In some cases, agents are underpricing the properties in order to attract attention to the property to obtain a lot of activity right up front. Since most buyers right now are looking strictly at foreclosures, bank owned and short sale properties, they are creating a competitive bidding environment with most of these properties which is bringing the prices up to where they would really like the offers to be...and what the bank is willing to accept. Is there a particular property that you are interested in? I am familiar with most of the properties in the area. Let me know and I will give you my opinion on the value of the property in question. You can reach me directly at: cfleming@coldwellbanker.com. Thanks.
0 votes Thank Flag Link Sat Jan 24, 2009
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