How much under asking price should I offer on a short sale?

Asked by Rhonda.johnson, Arlington, VA Wed Jul 20, 2011

Help the community by answering this question:

+ web reference
Web reference:


Mark LeMenag…, Agent, Lake Nona Orlando, FL
Sun Aug 21, 2011
The price you and the seller agree on a short sale does not matter. 2 to 4 months after you execute the contract on a short sale the seller's lender will tell you what the price is going to be and it will almost always be more than is in your contract.
2 votes
John Loulan, , Washington, VA
Wed Jul 20, 2011
Making an offer on a short sale is like trying to shoot at a target with a bow and arrow, blindfolded. The bank who makes the decision may very well move the target after you have been blindfolded. Every answer here contains some very good points. I hope you read them all carefully.
If the lender has not already approved a sales price it will be more difficult, if there is a second lien on the property the difficulty factor increases dramatically. Just keep in mind that even if your offer is accepted it is meaningless until the lender approves it. They have the ability to keep looking at offers during this process.
If you are currently renting don't give your notice too soon. You could be homeless. Find an experienced agent to help you and that improves your odds. But the chances are still fairly slim. If it doesn't work out don't blame your agent, they will be limited in what they can do for you other than good advice as to offering price. Also they can help you decide if you are wasting your time.
2 votes
Can I add more people in the offer?
By the time waiting for the Bank accept , the rate go up to high , so I worry for the loan , can I add one more person to the offer ? If it can , I need to do now or wait till Bank accept the offer? thank you.
Flag Thu Jul 11, 2013
Jeffrey Cars…, , 20008
Wed Jul 20, 2011
Great question Rhonda,

You should have an agent to advise you on what the fair market value is. Are there other offers on the property? Short sales are often bit up above the asking price as they tend to be priced below market value. If you go low, do not be surprised when you are outbid by another buyer who really likes the home. I would be happy to answer any other question you might have. I am a buyer agent licensed by DC, MD, and VA. Feel free to check out my website below.

Cheers and good luck,

Jeff Carswell
Taylor Properties
Direct: 202-251-2246
Web Reference:
1 vote
Marvin Brown, Home Buyer, Brookport, IL
Thu Mar 17, 2016
If's it's a distressed property offer whatever you feel like. Just remember that once you make an offer you can be held liable for it. Start with a very low offer and never commit "good faith" or "hold" money to the property. Remember in most cases these homes belong to banks that in addition to holding the title are also responsible for annual property taxes not to mention maintenance and upkeep of the property. In many cases, particularly in HUD foreclosures, the bank has already received a significant percentage of the market value of the home. The banks are in the process of attempting to undo the damage they did to the housing market during the "sub-prime mortgage meltdown". They hold title to all of this property now but along with the ownership comes the responsibilities. To say that it's a buyers market would be an understatement. Good luck
0 votes
Rudy Zuniga, Agent, Brea, CA
Mon Aug 22, 2011
The amount you should offer under is a personal decision; there are a few questions you need to ask yourself. What is my budget? Is this a long term or short term purchase? Is this an investment? The answer to these questions and a few other important questions plus good advice from your trusted sales agent should give you an Idea on what to offer. Bottom line is that each property is different due to various factors such as neighborhood, property condition and the number of liens. Trust in your experienced agent to help you find the best offer you can make for any property.
0 votes
Gerard Carney, Agent, Spring Hill, FL
Mon Aug 22, 2011
Short sales don't look kindly on under offer techmiques. The Bank many times does not even know what the selling price was set for by the listing agent, and many times will not accept that price when offered! You want the property, offer asking and be prepared for the bank to refuse that offer or counter!
0 votes
Gary Geer, Agent, Antioch, IL
Mon Aug 22, 2011
You can offer any amount you want. I would base my offer on recent comparable sold properties in order to get my offer accepted. If you try an offer that is low it may be rejected by the seller and or the bank.

All the best,
Gary Geer
0 votes
Ron Thomas, Agent, Fresno, CA
Sun Aug 21, 2011

Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.

Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”

Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)

We have found that extremely often, the LISTING PRICE that is set on SHORTSALES and REO’s are not determined, nor even discussed with the Bank: The banks play their cards very close to the vest, they will not tell the Listing Agents any more than they have to; they will not give us their lower limits. So usually, the LISTING PRICE on a distressed property is a number taken out of the air.

If you are considering a property, have a Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. If you look at enough CMA’s, you will see the trends.
0 votes
Michelle Gon…, Agent, Los Alamitos, CA
Sun Aug 21, 2011
How much do you NOT want your offer accepted? It isn't a matter of how much lower you should offer. The lender will make the ultimate decision on what price they will accept. If you want to even get the opportunity to have your offer presented to the bank then you want to ensure your offer is the highest and best.
0 votes
Amy Fisher, Agent, Washington, DC
Sun Aug 21, 2011
Two questions for you....

A. How much patience do you have?
B. On a scale of 1-3 how do you rate the property?
1 -"Only at my offer price!"
2."I'd consider a compromise but am not willing to go more than $--?---".
3. "It's a good value as offered. I don't want someone else to get it. I'd prefer to maximize my chances".

If you have a lot of patience, and lots of time and you value the property at #1 on the scale, offer whatever it is worth to you. Every low-ball buyer believes that they will be "the lucky one", and while it does happen occasionally it doesn't happen nearly as often as the infomercials would have you believe.

If you have a defined time horizon in which you hope to complete the transaction but want to kick the tires a bit and ask for free floor-mats then offer between 1-8% less. Expect a counter-offer and that it will take just as long to respond to you the 2nd time as it did the first.

If you are short on time and it's worth what they are asking, don't beat around the bush. Keep your fingers crossed that they respond timely and that after weeks of waiting you are not bested by another offer and have to begin the shopping process all over again.

Whatever you do, do not expect their response to be logical. You are dealing with a bureaucracy at the mercy of management turnovers; resulting in frequent shake-ups and about-faces in "how we do things around here". For your transaction their motto may as well be: "Consistency is the hob-goblin of little minds".

It may take 3 weeks or more to respond to your offer. By the time they get around to considering your offer they may have more than one offer. If they opt to respond to your offer with a counter offer, have you the patience to get back in Que.
0 votes
George Ross, Agent, Baltimore, MD
Wed Jul 20, 2011
Hi Rhonda,

I am certain that much of what I want to express has already been covered so for that I apologize. However this question is raised all to often in today's market and with that said, the answer is simple-- "A short sale is a walk in the park! Unfortunately the park is what we consider an amusement park."

I wanted to first congratulate you on taking a big step in seeking to purchase in today's market whether your a first time home buyer, investor, upgrading or one of the other many categories that you may fall into-- It is a wonderful time to buy! My second expression is, don't go it alone without a buyers agent and one that is FULLY aware of our market conditions and seasoned in what you are looking at which is a distressed sale (again it is a walk in the park!)

My reference to an amusement park when dealing with short sales is because you are faced with many of the same decisions and options when choosing to go through the process of purchasing a short sale.
While I can go through with explaining it, like I said initially, I'm certain everyone has more than likely provided all of that information.

So in closing, pause, read all the post, understand how the amusement park works and what you should expect and find a great agent to help you. While I handle short sales for both buyers and sellers I do have a solid strategy for accomplishing great outcomes for all involved in the process, it takes communication on all ends.

Good luck to you and I know you are going to have a great time in "Short Sale Land"!
0 votes
Kelly Putz, Agent, Fairfax, VA
Wed Jul 20, 2011
Hi Rhonda,

As a metro DC agent, I would advise you take the advice of agents from other areas of the country with a grain of salt. The DC market is, and has been, better than the entire country for the last year. So, if you are seeing a short sale here, then it is most likely a true short sale, meaning the list price is either the price approved by the bank or it is already underpriced to try and get interest.

There is no easy answer for your question, so I would ask you a few more to help you arrive at one:
1-Do you like the house enough to pay the asking price?
2-Do you like the house enough to pay more than the asking price?
3-Is it priced at, or better-than, market value?
4-Do you have a buyer's agent to help you figure out what you really want and get it for you?

Those are the three of the most important questions in buying any house. If you like the house enough to pay more than asking price, then have your agent include an escalation addendum that will up any other offer by $1000 up to your decided limit. That way you can get the house without having to go back and forth with any other offers that may be on the table, unless they've already outbid your top number.

Hope this helps!


Kelly Putz
Buyer's and Seller's REALTOR®
Keller Williams McLean
0 votes
Dallas Texas, Agent, Dallas, TN
Wed Jul 20, 2011
Your buyers agent needs to assist you NOT all sales offer are placed under list price SOME are over list price if property "hot" many families want to submit offers.

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes
Sara Rubida, Agent, Arlington, VA
Wed Jul 20, 2011
Hi Rhonda, like any property for sale, a short sale may sell at, below or above the list price. There is no magic formula. Work with an experienced agent who will help you decide on an offer price based on the local market, recent comps, and your desire to own this particular property. And. . .if you get the property, totally be prepared for a lengthy, frustrating transaction. You don't want to enter into a short sale situation if you have a drop-dead moving date with no place to live afterward! I've heard recent statistics that on the average, short sales have been selling for 9 to 10% under the market value of a comparable regular property--which could mean that you need to offer above the short sale list price in some cases, rather than below the list price. Even short sales can be competitive in areas where inventory is tight (such as here in Arlington), and where the list price is a teaser price to whip up auction frenzy--ask your agent.
0 votes
Alan May, Agent, Evanston, IL
Wed Jul 20, 2011
I have to disagree with those who've indicated that you can't (or shouldn't) offer below list price.

I have helped several buyers purchase short-sales at significantly less than list price, successfully. (of course I've also had banks reject full-price offers on short-sales, and come back with a higher than list counter).
0 votes
Benjamin Ste…, Agent, Washington, DC
Wed Jul 20, 2011
Make sure your have a Buyer Agent with a true (and legal) loyalty to you. Get a Market Analysis to know what homes have sold for, that are located near and similar to yours. And realize that you will be working with two sellers; the owner and the BANK both with benefits and losses. The process will be trying, frustrating and lengthy, usually 3-4 months before you have a ratified contract and at any time, if the bank gets a better offer, they will take it over yours. Once you get a ratified contract, the bank will want you to go to settlement quickly so have thick skin, lots of patience, be well prepared and have a good adviser to assist and guide you through the process. If I can be of further assistance contact me back.
0 votes
Ellen Passman, Agent, Washington, DC
Wed Jul 20, 2011
That depends comps in the area.
0 votes
Gerard Carney, Agent, Spring Hill, FL
Wed Jul 20, 2011
you shouldn't offer below asking, here is an explanation of Short Sale made simple, read it and you will better understand what us Realtors go through!

Please listen and understand. A short Sale is a grace of God move by the financial Institution that allows the loan owner to get out from a financial mess.
There are rules to be followed, there are questions that need to be answered,

First you have to be in financial hardship and you have to be behind by 3 months or more of mortgage payments
You must not have equity enough to pay off the principal
you must abide by the rules of your financial institution
you must keep in mind that any time in the short sale process, your bank can turn around and start the foreclosure process and end your hopes of a short sale.
Short sales are a contract with a first and second party. these parties do sign the contract and are bound to all that the contract holds to be true.
Unlike a normal contract, there is no closing date or if there is it has no bearing to completion of the sale
There is a third party in this contract and there will be added verbiage somewhere in the contract that will mention that and also advise all involved that this third party has full control of this contract even though they have no signature on this contract
The asking price may not be the price that will be accepted
The offered price, even if higher than the asking price may not be accepted
The bank can refuse any offer
The bank can accept any offer
The bank will have several pages of addenda that will need to be signed if they do accept
Never assume that the bank which is a third party
The Bank can take as long as they want deciding on an offer
The Third Party can decide on smaller commission to the agents involve, the can also decide on no commission at all.
The Third Party can at any time disrupt the continuity of the sales process.
The paper work for a short sale has to be 100% complete for both seller and buyer or the third party's underwriter for the short Sale can leave the offer and the contract in Limbo for as long as it takes for said paperwork to be submitted, often telling no one what is left to sent in. You must be sure that your agents know how to handle a short sale.
Do not pursue a short sale if you are looking to buy a house quickly
never think that a short sale is a cheaper or better deal, there are times that a short dale has sold for proper market value and a rare few that sold for more than market value.
If you enter into a short sale, you may want to have a Real estate attorney on hand to understand the full procedure and any interpretations of the contract wording, Agents and Realtors are not allowed to advise you in matters but rather to make sure the sales process goes smoothly and correctly.
Please always sit down with your Realtor or Agent and explain what you are looking for in this market and listen to what they tell you. You may find some very good deals that are not foreclosures or shart sales so please keep you mind and heart open to some of the market advice we have to offer. We work every day in the market and are familiar to what are good deals and which are not!
Good Luck to everyone that are getting ready to look or are already looking for that perfect home, take you time and don't jump on perceived good deals but weigh them all out and look for the pros and cons of every house you look at!
0 votes
Amy Fisher, Agent, Washington, DC
Wed Jul 20, 2011
In real estate you will soon learn there are no absolutes. Ask your real estate agent for comparables, ask you agent's advice then consult your inner "I want this meter" and proceed accordingly.
0 votes
Lyn Alexander, Agent, Bethesda, MD
Wed Jul 20, 2011
You or your agent might be best served by talking with the seller's agent to see if the bank holding the mortgage has established a drop dead price it needs to give short sale approval, including any "seller help to buyer for closing costs". And then try to be as close to that as possible. Otherwise you could make an offer that sits on a desk with a pile of others until the right offer comes along. That would tie you up unnecessarily and be really frustrating! You want to get a good house at a good price and move on with your life, right? Not move into limbo.....
0 votes
Christopher…, Agent, Tarrytown, NY
Wed Jul 20, 2011
Hi, You have to be careful with shortsale offers these days. The banks are alot more savvy then most buyers think and are being very careful when it comes to accepting an offer. The bank will conduct an appraisal and Broker Price Opinion to help determine the value. Many buyers think they are going to get a steal and that isn't true. Keep in mind many shortsales are priced below market value but if the bank feels it's too low they will raise the price. The bank will also make counter-offers and even entertain bidding wars.

Web Reference:
0 votes
Damon J. Bro…, Agent, Upper Marlboro, MD
Wed Jul 20, 2011
I would always offer the list price because in most cases the bank will counter anyway & there are numerous factors the bank take into consideration which are market value, how much is owed on the house, & how much the sellers are delinquent if they are at all. Because of these factors many buyers are mislead to believe that you can low ball on short sales then are surprised when the bank comes back to counter there offer. I have dealt with nearly every bank from Bank of America, Wells Fargo, Wachovia, ASC, GMAC, EMC, Ocwen, Saxon, Chase, & many small banks & I strongly recommend offering the list price.
Web Reference:
0 votes
Alan May, Agent, Evanston, IL
Wed Jul 20, 2011
Rhonda - there is no "magic percentage" to offer.

Some sellers are dramatically overpriced... others are priced pretty well... and believe it or not, there are sellers out there today that are priced BELOW market value.

So, offering 10% below list on the first example, might be overpaying, while offering 10% OVER list, on the last example might still be a good deal. It's all about determining real market value, and that's where your Realtor can come in handy by knowing the market and running comparable market analyses for you.

Good luck.
0 votes
Karen Parsons…, Agent, Laguna Beach, CA
Wed Jul 20, 2011
Hi Rhonda,

There is no generic answer to depends on the market value of the home. Most of the time, we offer more than the short sale list price. Usually the listing agent's list at an artificially low price to attract attention and get the process started.

I would find an agent you trust.....and I have a great one in your area, if you'd like a referral (just shoot me an email) and find out what the home is actually worth, and then make your offer.

0 votes
Search Advice
Ask our community a question

Email me when…

Learn more