Home Buying in Costa Mesa>Question Details

Madison, Home Buyer in Newport Coast, CA

Planning to buy a preforeclosure property, lender has approved $519k shortsale, should i make an offer at $480k, what are the risks, i am a cash buyer

Asked by Madison, Newport Coast, CA Thu Sep 15, 2011

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I've dealt with a lot of short sales, pre-foreclosures, and REO's, and it's been my experience that when a bank approves a price to put a home on the market, it's because they've either had a previous offer and got to the point in the transaction where they had an actual appraisal, OR the homeowners are far enough behind that they've ordered a BPO (broker's price opinion) to fairly price the home in current market conditions. In my experiences over the last year, once this price is set they typically start by saying they expect 88% of the current market value. So if it's CMV is $519K, 88% would be $456,720. I would start by having a realtor do a market analysis to see what price they come up with, since we're not sure if the $519K is the actual value or the 88% of the value they want. Also, look at how long it's been on the market. most banks I've dealt with recently will expect 88% during the first 30 it's listed, but will drop their expected price to 86% after 30 and eventually to 84% after it's been on the market over 60. My advice would be to work with a realtor, not the listing agent, and put in an offer. If it's not enough, the bank will counter! Best of Luck!
2 votes Thank Flag Link Tue Sep 27, 2011
That might be a little low it all depends on the comps in the area. They have arrived at that price by what others are selling for. But you try it,
0 votes Thank Flag Link Tue Sep 27, 2011
It depends on what the property is worth. Are you working with a realtor? A realtor can provide you with recent sold comparibles to show you a range in the approximate value of the home. Far to often buyers make the assumption that because a home is a short sale or a foreclosure it's a good buy. Any listing can be over priced or underpriced regardless if it's a foreclosure or not. I would suggest you look at the data for comparible properties and decide if you feel $480k is a fair price. If it is, go ahead and write $480k which is less then 10% off list price. Be aware however that if $519k is a great price and you have competition you may lose the property. Even in the current market homes sell above list price when marketed at an agreesive list price.
0 votes Thank Flag Link Tue Sep 27, 2011
Well, if the lender has already approved it at 519k, they might not be willing to look at lower offers. However, it is always worth a try. Some banks get excited about cash buyers; others see all deals as cash--since, at the end of the day, the bank will get cash anyway you look at it.
0 votes Thank Flag Link Wed Sep 21, 2011
Hi Madison

Did anything happen to that house that you wanted?

Vadim Agamirzoyan
Web Reference: http://www.SDhomes4sale.com
0 votes Thank Flag Link Wed Sep 21, 2011
Hi Madison - I would recommend consulting with a local Realtor so they can look at recent comparable sales in the area. Because you are a cash buyer will make you more favorable. However, the bank may not accept the amount offered. And even though you are a cash buyer, I would recommend including an appraisal contingency (meaning you have the property appraised) to ensure it is at that value.
0 votes Thank Flag Link Mon Sep 19, 2011
There are always risks and rewards to anything that you do. I sold a house that was a short sale with an original list price of $599,000 for $500,000 in East Costa Mesa. The risk of making an offer that is below market price is that your offer gets rejected and the bank will not accept another offer from you. This is a small risk to pay when there are 217 active listings in Costa Mesa.

Don't forget an equity seller that has a need to sell right away can often be a better deal than a bank owned property that is trying to get the highest market price for that property. REO's often need extensive work as well where as an equity property can sell for less and need less work.

There are many deals out there in Costa Mesa and surrounding neighborhoods. Finding an agent to work for you full time in this ever changing market is key to success. And remember the seller is the one paying my fee. So hiring me to work for you full time will not be any money out of your pocket.

I look forward to hearing form you and finding you a great deal out there. (949)294-7043

I live and work in Costa Mesa and look forward to helping you out!
0 votes Thank Flag Link Sun Sep 18, 2011

If you do not have a realtor working with you, you can always consider getting in contact with any realtor and have him check the COMPS to make sure the price of $519K represents its true value of that property.

There could be two answers on your questions and it depends how much you like that house and how much time did you spend to find this house and if you are Absolutely sure this is the House that you WANT TO BUY!

If you want me to shoot and email I can send you COMPS and give you my opinion of the true value.
If this is the house you want and $519K will make the deal I would say go for it, but on another hand if you are an ALL CASH buyer then you really have a huge benefit!!

There are many things involved including who is the lender and who is the agent that negotiates with the Bank and where the info about $519K is coming from!

I personally negotiate lots of short sales and know all BS that most agents come up with.

Post an update!

Team Of Excellence
Vadim Agamirzoyan
(877)247 MySD
Web Reference: http://www.SDhomes4sale.com
0 votes Thank Flag Link Thu Sep 15, 2011
i dont have an agent yet...and this is my first time buying home
0 votes Thank Flag Link Thu Sep 15, 2011
What is your agent advising--and have you reviewed comps--recently sold similar properties in the immediate area, if so, what did the data suggest as to a fair offer...so not to waste anyone's time, inform well before making the offer....how badly do you want the property...
0 votes Thank Flag Link Thu Sep 15, 2011
Hi Madison,
I don't see any risk in offering $480k. What is the worst thing that can happen?
Good luck,
Web Reference: http://ocnorth.com
0 votes Thank Flag Link Thu Sep 15, 2011
If the lender approved a sale of $519,000 teh chances they take an offer any less is very slim especially an offer as low as 480k. The bank would have to start the process all over again to even consider it, it will fully depend on what the bank appraisal and bpo's came in at. you should ask the listing agent becuase you could be wasting your time offering any less as they probably took 3 to 6 months to agree on the price they did.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Thu Sep 15, 2011
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