How do you know how much to bid on for a short sale?

Asked by merril.simon, Northridge, CA Mon Sep 16, 2013

If the bank has approved a certain amount, how do you know what to bid?

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5
Vicky Chrisn…, Agent, Purcellvile, VA
Tue Sep 17, 2013
As Tony indicates, your REALTOR is the best one to advise you. Unfortunately there is not a magic answer to your question. Every piece of real estate is unique, as is every situation. A REALTOR will have information about the market, recent comps and your situation as well as if there is competition in the offer process. Those things will help the agent make suggestions to you about what to offer. Also as Tony says, price isn't everything.
1 vote
There are very, very few properties available in my area. There are a number of foreclosures/short sales, though. I have consulted with my realtor (who is great), but truly it is a crapshoot as banks seem to be quite mercurial at what they will accept.

There are properties that are being sold for $50K over asking, for example.
Flag Tue Sep 17, 2013
Todd Schneid…, Agent, Northridge, CA
Sat Feb 7, 2015
If the bank has approved a certain price the listing agent should know what that number is. The Listing agent will usually place that information on the MLS for agents to see. You have to treat each house as there own separate situations. Generally the pre-approved number is the number the bank wants, and they won't budge. Although I have seen situations where the house has been on the market at that price for a long time, and ended up taking a lower offer. It will really depend on the bank, and what they are willing to do.
0 votes
Todd Schneid…, Agent, Northridge, CA
Sat Feb 7, 2015
If the bank has approved a certain price the listing agent should know what that number is. The Listing agent will usually place that information on the MLS for agents to see. You have to treat each house as there own separate situations. Generally the pre-approved number is the number the bank wants, and they won't budge. Although I have seen situations where the house has been on the market at that price for a long time, and ended up taking a lower offer. It will really depend on the bank, and what they are willing to do.
0 votes
Tony Becker, , Winnetka, CA
Mon Sep 16, 2013
This is a great question. Your Realtor usually has the tools and knowledge to perform a Comparative Market Analysis (CMA) which will help determine the value of the property in today's market.

Short sales are challenging and the price offered is just one of several areas that must be taken into consideration by the lender. If there are multiple liens this will also complicate matters.

Consulting with an experienced Realtor who understands short sales will be your best option.

Good Luck
0 votes
Sara Mehrpou…, Agent, Los Angeles, CA
Mon Sep 16, 2013
Hi Merril,
Some short sales are pre-approved by the lender (bank) for the price. If that is the situation, then that is the minimum amount that the bank is looking to accept. However, if there are multiple offers -- there is a possibility that the seller will want to accept an offer that is above that approved amount and submit that offer to their lender. Note, not all short sales are pre-approved so the list prices are not guaranteed.

Feel free to contact me any time.

Thanks,
Sara Mehrpouyan
Direct phone 818-903-2040
Rodeo Realty
Bre license #01712757

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