Willbuysoon, Home Buyer in North Hollywood, Los...

On a short sale, do banks ever compromise and sell a property at a lower price than what they wish to recover?

Asked by Willbuysoon, North Hollywood, Los Angeles, CA Mon Nov 30, 2009

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14
Jeri Creson, Agent, Studio City, CA
Fri Jun 25, 2010
Everything depends.... depends on the bank...on the negotiator...on the circumstances of the seller....on the market itself. Typically, a bank will do a BPO (Brokers Price Opinion - like an informal appraisal done by a non-party agent to the transaction) and there is a net range attached to their findings. If you feel that the BPO findings and net range you have been offered by the bank is unrealistic - meaning the price came in too high, and a fair market price needs to be lower, banks will sometimes take a second look. I have submitted counter offers to the price the bank comes back with, armed with substantial evidence of a lower value in the way of comparable sales, and the bank has reconsidered and accepted the counters. On the other hand, if the overwhelming evidence indicates that the price they offered would be quickly snapped up by other competing buyers - then no, generally, you won't be successful in getting the price lowered.

I like to remind buyers that short sale negotiation is just that: Negotiation. It isn't (and shouldn't be) order-taking where an agent just passes along the information dictated by the bank and asks you to "be ok" with it. A buyers agent in a short sale should negotiate skillfully and present your case in a strategic manner to get you the best results. Banks do - can - and will bend. Nothing is written in stone, though they'd like you to believe that!
2 votes
Brad Korb, Agent, Burbank, CA
Mon Feb 17, 2014
Yes ,the bank will lower what they are looking to get out of the house it also depends on what the investor ( the owner of the loan ) is willing to take as a pay-off ! You have to remember most of the time the bank is just acting as a collection company ,which means they are just getting a fee for collecting your monthly payment Good luck !
0 votes
Huy Nguyen, Home Buyer, Los Angeles, CA
Tue Dec 24, 2013
Depends in the area and how long the property has been on the market.

Good luck
0 votes
Annette Law…, Agent, Palm Harbor, FL
Tue Dec 24, 2013
this question was posted Nov, 2009.
0 votes
Yanni Raz, Mortgage Broker Or Lender, los angeles, CA
Tue Dec 24, 2013
Yes, it usually depends on the market condition. If you have a reason as to why the price should be lower it should definitely be mentioned. If they disagree its usually because they probably have someone else they think they can sell it too.
0 votes
Brad Korb, Agent, Burbank, CA
Sat Dec 21, 2013
Yes the banks will take less than they want,hopefully whoever is helping you is a good negotiator for you ,good luck !
0 votes
Bill Eckler, Agent, Venice, FL
Thu Dec 5, 2013
This is fairly common......however, supportive comparison information,detailed documented problems, work estimates, etc. will greatly enhance your chances for success. Of further benefit would be having a "short sale" experienced agent in your corner to advocate for you.

Unfortunately, just throwing a lower number out there may not enjoy the success your are seeking.

Good luck,

Bill
0 votes
Huy Nguyen, Home Buyer, Los Angeles, CA
Thu Dec 5, 2013
Four years old!!!!!!!!!!!!!!
0 votes
Ron Thomas, Agent, Fresno, CA
Tue Jan 8, 2013
Four years old!!!!!!!!!!!!!!
0 votes
Sona Gallatin, Agent, Santa Clarita, CA
Tue Jan 8, 2013
Depends in the area and how long the property has been on the market.

Good luck
0 votes
James Gordon…, Agent, Hamilton, OH
Fri Jun 25, 2010
Willbuysoon by definition in a short sale the bank is agreeing to take less than they wish to. They signed a contract with owner to be paid in full and they are sure not going to get that now.
0 votes
kathryn dav…, Agent, Corona, CA
Tue Dec 1, 2009
Yes, Banks will sometimes compromise their "net amount" for something a little lower in order to get the sale through. The best way to get that accomplished is with a persuasive realtor who knows their short sale stuff. :) And there has to be a good reason.... buyer's loan docs expire in 48hours and the offer is the highest in the neighborhood...... seller is considering bankruptcy and you want to get the short sale done asap so seller can't add it to the BK, etc
0 votes
Grace Morioka, Agent, San Jose, CA
Mon Nov 30, 2009
Hello Willbuysoon and thanks for your question.

In answering your question, I am going to assume that the bank in your short sale has approved the sale but at a price higher than you anticipated or wanted to buy. The truth is that sometimes the bank will compromise on the price--the listing agent and I, as the buyer's agent, just got the bank in our short sale to agree to a lower price, but it cost us both in our commissions. Similarly, at other times, the very same bank will firmly disagree to any price change despite the reams of papers I can provide to prove that their price is incorrect. In fact, even after an appraisal is completed and the price is determined to be lower, the lender may never agree to a price reduction.

in truth, banks seldom agree to "give" anything without "getting" something in return. In my case, both Realtors agreed to help our clients by reducing the commission. However, if there is no "chip" with which to bargain, you may find the bank as stubborn as a mule in cement in ever agreeing to any price changes or concessions. It all depends, as Deborah noted below, on how "motivated" the bank is to off-load the property. Surprisingly, banks are not all that willing to dump a home right now.

Work with a qualified short sale buyer's agent to help you navigate the short sale waters and to understand your options in working with the seller and the lender(s) in the sale. Good luck!!

Sincerely,
Grace Morioka, SRES, e-Pro
Area Pro Realty
0 votes
Deborah Brem…, Agent, Los Angeles, CA
Mon Nov 30, 2009
Hi Will;
The lender(s) on a short sale are, by definition, taking a loss. The first trust deed holder usually takes a smaller "hit", percentage wise, than the junior lien holders, who may only get pennies on the dollar.
If the first and second trust deeds are held by the same lender, there is often much more flexibility in price than when the loans are held by different lenders. If you are looking for a real bargain, look for short sales with those types of profiles.
Certain lenders are, at different times, more flexible than others. It all depends on how much inventory they have on their books, and the market demand.
Remember that markets are efficient. The buyers ultimately determine the value. High demand = higher prices. Lenders respond to the pressures of the marketplace.
Would you like a more personal, confidential discussion about short sales? I am a Certified Short Sale Professional Realtor, and would be happy to help.
Deborah Bremner
REALTOR
Certified Short Sale Professional
Coldwell Banker Brentwood West
11999 San Vicente Blvd. Suite 100
Los Angeles, CA 90049
(D) 310.571.1364
(C) 310.422.4288
(F) 310.820.1457
http://www.TheBremnerGroup.com
TheBremnerGroup@gmail.com
Blogging at: http://TheBremnerGroup.com/blog
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