When you enter the realm of short sales, it's truly the 'Wild, Wild West!" Because the rules are just an illusion, it become increasinly difficult to project what the outcome will be.
For instance, a critical piece of information regarding your question is:
1. How many lenderrs are there?
A recent short sale in Tampa had a 'approved price' of $470,000. (Approved by Bank of America) However, Chase had a second and beneficial a third. Add to this the fact that the homeowner also owned more than five other properties. At this moment, no conversation regarding settlement has occured with any other lenders. The investor and PMI company are also lurking in the shadows and will assert their influence, without question. Now, another important factor to consider is this 7 acre estate with a lake and dock is in pristine condition and would retail for nearly $650,000. Now comes question two suggested by others.
In this case, Bank of America instructed the listing agent to place the $470,000 list price on this home.
2. What it the value of the home?
Short sales are not deeply discounted as the sales statistics reflect in the Tampa Bay area.
3. How much do you want this home? The correct answer here is ...:"I'm not in love with it. If I get a great deal I'll do the 'Happy Dance' but if it falls through I will not shed a tear."
Do not get emotionally invested in a short sale. The 'logic' you will observe will be heart breaking.
4. As in the scenerio described in #2, the buyer will need to be prepared to pay at least an addtional $150,000 dollars. BAnk of America may require additional 'CASH' tossed in on the side.
5. Consider the Seller (homeowner). The homeowner knows the bank and all other players will make certain they receive not cash benefit from this sale. The goal of the seller is to have the deficiency waived. This can only occur if the right buyer, one who is able to effectively counter the actions of the banks, investors, PMI, and even the mortgage management company. So, how do they identify the buyer who, in principle, is able and is willing to go up 150 to 200 thousand dollars? That is and should be the offer the owner (seller) will accept.
Now what the actual settlement with all the parties end up being can be entirely different,meaning a real deal can be negotiated. Having a buyer who makes an offer at the top of the ability, is always a bad choice. Unfortunately, it's much more complicated than that, but a pro will make it look easier...which it never is.
There are no rules. It's the "Wild, Wild West." You need to have a guide who can do the research, anticipate the counters, measure your options and strategy, and whom you must trust.
Best of success in finding your new Sarasota Home,
ReMax Realtec Group
Palm Harbor, FL
727. 420. 4041
More about Dunedin and Palm Harbor at http://www.MyDunedin.com
Web Reference: http://www.MyListingbook.listingbook.com
Now, there may be some caveats, as mentioned below too. It may depend on the specific situation, if there are other offers, etc. Your agent can be your best resource here in finding out the situation and helping you determine offer price.
Keller Williams Realty
If you're paying ALL CASH you absolutely need to hire an attorney for $500 to review the title committment and the contract and your closing docs. You can have a very experienced attorney review these for you via email:
Larry Fuentes, http://www.fklaw.net/
It will be well worth the piece of mind if paying ALL CASH.
All the best,
When the first offer is submitted to the bank with the seller's short sale package, there is a lenghty review of the seller's eligibility to short sell and then
1) A Broker's Price Opinion is ordered â€“ the bank will hire an independent broker who will conduct his own market analysis and determine the market value of the property based on the latest comparable sales in the area. These brokers do not in general go in depth to discount the property's value based on its actual condition.
2) COUNTERING THE SHORT SALE APPROVED PRICE AS SECOND BUYER IN LINE:
a) Bring in any type of contractor and provide the seller official repair quotes to bring the property up to market value. The listing agent will then resubmit your offer with these quotes to justify your lower offer. The bank will review its approved short sale price and possibly adjust (discount) its asking price and possibly accept your lower offer.
b) Sometimes brokers hired to conduct BPO'S are not experts in the area of the subject property. If the short sale approved number does not seem accurate, have your agent put together 2-3 closest comparables that support your offer price and submit them with your offer as well (through the listing agent.)
In Conclusion: the more accurate documentation you provide to support that you are offering "fair market value" based on the latest area sales AND condition of the property, the more you have chances of convincing the bank to accept your offer.
So, if it's been more than a couple of weeks you may be able to get the Seller to try a lower price. Your first hurdle is getting the Seller to accept your offer.