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Nathan, Home Buyer in Central, Cleveland, OH

Short sale initial bid in central ohio (hilliard to lewis center)

Asked by Nathan, Central, Cleveland, OH Tue Mar 11, 2008

My wife and I are looking to purchase a home in the west (Hilliard) to north (Lewis center) area of Columbus. We are highly considering short sales, however before making a bid on one I would like to have a professional opinion on what a good first bid would be on say a 300K short sale, as well as what a reasonably good estimate of what my final costs should be. I realize that in the case of short sale there are more factors then a standard sale, but a more simple way to put this might be; are lenders generally flexible in these cases and what % below the asking price is reasonable. Thanks in advance for any assistance. Ultimately I want to spend no more then 270K and is this reasonable on a 300K house?

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That is reasonable. Lenders have been more reasonable and responsive recently than before. I have had buyers recently get accepted offers in Hilliard, Dublin, and Olentaangy S D's for 65% of Comparable Value to 85% of "CMA.". Investors have been offering even lower. Good Luck! You are buying at the best time.
0 votes Thank Flag Link Wed Mar 12, 2008
Natan,

I think you have the process correct. Since your offer would be alot lower, I would offer them this amount and inform the agent representing the bank that this is your highest and best. They will take some time getting back to you with the hopes of another offer. Trust me banks are not in a hurry. FHA is a great way to go, do you know you don't have to put the 5% down with FHA? Last but not least, did you know HUD is offering a special program if you purchase one of their homes. You have to be a owner occupant and there is a few stipulations. Good luck RW

PS if you are working with an agent, it is not my motivation to get in between you and your agents relationship. We all work hard and I respect that. Good luck again.
0 votes Thank Flag Link Tue Mar 11, 2008
There's no set formula on what a buyer should offer on a short sale property. Each case is different depending on what is owed on the mortgage and what the bank will accept. Be prepared for it to take longer than purchasing a property that isn't a bank short sale. It's possible it could take 3 to 6 months. The bank generally won't pay for a home or gas line warranty either. Also be prepared for potential surprises even after the bank has accepted your offer (i.e., they tell you that you need to bring more money to closing than you initially were told).

If you have the time to wait, a short sale property could be a good deal. Just be prepared and educate yourself on the process as much as possible before you make the offer. I've included a helpful link for more information. Good luck!
0 votes Thank Flag Link Tue Mar 11, 2008
Ronnie thanks for the quick responce. I was planning on putting about 5% down and both my wife and I have excellent credit. I went ahead and have pre-approval on my loan and should be able to clear any hurdles with the financing aspect. My primary drivers is that I am unwilling to break the 270K point on any house and am willing to hang in the market to find just the right house for the right price. I'm just trying to take advantage of a great buyers market and get a little more for my money then future markets might allow. We will more then likely take an FHA loan out for 30 years on the property. Am I amking any bad moves?
0 votes Thank Flag Link Tue Mar 11, 2008
Nathan,

This is a case by case situation. Have your Realtor put together a CMA on this particular home. I have been selling REO's, HUD and short sales for the past 8 years and I am surprised everyday how different these transactions can go. Every lender is completely different. Regardless of your offer, prepare to wait a week or two for a response to your offer. The condition of the house is a major factor as well.

Make sure you have your financing in order. What kind of loan are you doing? I would say your closing cost shouldn’t be anymore the $2500-$3000, and that's including title. Good luck. RW
0 votes Thank Flag Link Tue Mar 11, 2008
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