What % of the balance owed should I offer in a Short Sale ie. 100k owed what % would be a respectful offer. Thank you for your help. TG

Asked by Tom Galladay, Orlando, FL Fri Jun 22, 2012

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Don Tepper, Agent, Burke, VA
Fri Jun 22, 2012
Forget what's owed on the property. That's totally irrelevant.

The only thing--the ONLY thing--that matters is: How much is the house worth in its present condition? That's it. That's all. Let's repeat: What is the house worth in its present condition?

Then you pay no more than that amount. You probably should offer less. Your Realtor can advise you.

As for a "respectful offer": Forget "respectful." Respectful to whom? The seller? The seller won't see a penny from the short sale, regardless of the final price. Respectful to the bank? No need for that. For them it's a business transaction. The only thing you need to be respectful of is your money--the amount you pay. Respect yourself.

Hope that helps.
2 votes
Perfectly explained.
Flag Fri Jun 22, 2012
Michael Joynt, Agent, Orlando, FL
Sat Mar 30, 2013
Yes its true, different banks have different processes and policies for their short sales. So having a knowledgeable agent working for you with negotiations is very important. Sometimes listing with no experience can cause some challenges along the way but if everyone works together the seller and buyer win, yeah!
One other thing you may want to keep in mind. The bank servicers receive payments along the way for servicing so they slow things down a little.
Good Luck!
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Sun Jun 24, 2012
Unfortunately, Tom is not alone in not truly understanding what exactly a "short sale" entails.

I see consumers all over the internet chomping at the bit to buy a short sale.......and I think to myself - they don't have a clue as to the meaning and process.

Many see the term short sale, and think: "Bargain" !

I see the term short sale and think: "headache"!

0 votes
Alan Martin, Agent, Orlando, FL
Sun Jun 24, 2012
I echo others who have questioned your understanding of what a short sale is and what it means to the variouse parties involved. I would be happy to help you with your understanding if you would like to call me 407 832 4888
0 votes
Jennifer Bar…, Agent, Winter Park, FL
Fri Jun 22, 2012
In this market you should offer the listing price so long as the comps are supporting it. In many cases the bank will ask for more. However sometime the seller has negotiated ahead of time and agreed on the listed price. The days of low balling in the Orlando market is over. Our prices are steadily moving up and that is a good thing for this market.

Jennifer Barker
Exit Realty Central
0 votes
Jennifer, I have a limited amount of cash to pay for a desirable property. I was not trying to LOW BALL anyone. That is why I asked what a RESPECTFUL offer would be.
Flag Sat Jun 23, 2012
FlaRent, Inc., , Orlando, FL
Fri Jun 22, 2012
If you want the property offer what it is worth.
0 votes
Mark LeMenag…, Agent, Lake Nona Orlando, FL
Fri Jun 22, 2012
Respectful to whom? The seller? They don't care. They just want a contract they can include in the short sale package to start the process. The seller's lender? They don't care. They will agree to market value and it will take months for them to decide.

Sorry Tom, but I don't think you understand what a short sale is all about. I just closed one that took over 3 months to close because of various problems. At one point my buyer asked, "Don't these people want to sell?" I replied, "Of course not, they have to sell but no seller in a short sale wants to sell."
0 votes
Alys Esmond, , Orlando, FL
Fri Jun 22, 2012
Don is correct in that the lienholder bank will only consider the current market value of the property, BUT, knowing how much is owed, how many lenders are involved and to what lender the money is owed is important information for you and your REALTOR to consider.

Different banks have different processes and policies for their short sales, so having a knowledgeable agent on your side to assist your negotiations is very important to successfully getting to the closing table.

Alys Esmond
B.Sc.(Honours), REALTOR®, REOS

CENTURY 21 Professional Group, Inc.

7575 Dr. Phillips Blvd. Suite 170 Orlando FL 32819
(321)695-5593 Cell
0 votes
Antonio Vega…, Agent, Saint Cloud, FL
Fri Jun 22, 2012
Agree 100% with Don Tepper.
Homes will sell at Market Value, irrelevant of how much is owed. The bank will simply write it off as a loss, but they will not sell for less than Market Value....taking in consideration condition, of course.

Tony Vega
Charles Rutenberg Realty
0 votes
Annette Law…, Agent, Palm Harbor, FL
Fri Jun 22, 2012
Tom, it's a simple process. Here it is laid out orderly for you.

Step 1
Is the home showing deferred maintenance?
Has the home been damaged?
Is the systems in the home at end-of-life?
What do the comps indicate?
What is your ARV calculation?

Step 2
Who owns the mortgage?
When was the mortgage granted? (a 2001 mortgage is quite different than a 2006 mortgage)
How many lenders exist?
How for into the foreclosure process is the home?
Has the home been pre-approved for a short sale prior to your interest?
Is the owner in default at this time?

Step 3
How was the listing price reached?
How long has the home been listed for sale?
Has the owner truly committed to selling the home?
Do you know their end game?
Who is going to engage the bank or their surrogate?

Step 4.
Make offer based on historic value bracket of that lender that coincides with the time in which the lender will be evaluating your offer. Some will evaluate in 30 days, others can take longer that 6 months.

Without a bit of research you are truly flying blind.
"% of short sale" reflects you are attempting to match a short sale with conventions that apply to traditional sales. That, you will discover, will not serve you well. Your focus is on the wrong subject and with the wrong intent.

Best of success in buying your Florida real estate
0 votes
Deborah Wint…, Agent, Orlando, FL
Fri Jun 22, 2012
The price offered should be dependant upon the condition of the home and the market value currently, it doesn't really have much to do with the balance owed on the home at all. If the house is in complete disrepair and requires a strong conventional mortgage or cash, you should be able to obtain the home for less as well. Good Luck! Deborah Winterhalter, Realtor, Charles Rutenberg Realty 407-616-4519.
0 votes
Rosendo Abreu, Agent, Conway, FL
Fri Jun 22, 2012
The bank holding the seller's mortgage will base its sale price decision on a Broker's Price Opinion (BPO) which essentially states the current estimated market value or the property. The bank is not setting its price based on what's owed.

You should therefore make your offer based on a Comparative Market Analysis that your sales agent should be able to provide.

The balance owed by the seller is not the primary consideration for your offer since the lender may forgive a significant portion of what's owed.

Hope this helps.
0 votes
Greg Welch, Agent, Henderson, NV
Fri Jun 22, 2012
My best suggestion for you is to offer your property at current market value, after you present the bank with an offer close to current market value they will ask an agent to do a BPO (current market valueation) and if they are close you have a better chance of your buyers offer being excepted
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Fri Jun 22, 2012
How do you know what the balanced owed is? The question is what is the house worth, not what is owed. If the house is worth more than what is owed I'd guess the bank will not appove the sale. They will do a BPO to find out the current market value and base any offers on that, not what is owed.
0 votes
Ann Ryan, Agent, Doral, FL
Fri Jun 22, 2012
Tom, it's not about what's owed, it's about what a fair price is for the house on the current market. There are folks that owe $100K on a house worth $30K, and folks that owe $100K on a house worth $90K. Talk to a local realtor and have them do a CMA for you to figure out what a good price on the property would be.
0 votes
Carl Head, Agent, Orlando, FL
Fri Jun 22, 2012
The balance remaining on the loan should'nt have anything to do with what you offer. If you're working with an agent, he/she will do a market analysis of comparable homes sold recently in the area.to help you determine what you should offer.
I hope this is helpful. Please e-mail me directly carlrealtycenter@aol.com, or give me a call 407-832-4650 if I can help you further.


Carl Head
Realty Center
0 votes
Linda Jokben…, Agent, Orlando, FL
Fri Jun 22, 2012
Doesn't matter what's owed. Only thing that counts is market value of the property. That's what the bank is expecting for you to pay.....
0 votes
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