do banks accept bids lower than asking price on short sales?

Asked by Lisa, New Port Richey, FL Wed Aug 12, 2009

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Fred Strickr…, Agent, New Port Richey, FL
Wed Jul 11, 2012
The banks will usually accept lower than asking as long as it is within 1% - 3% of asking price. Some short sales the bank will have already determined a pre-approved price based on appraisals and/or broker price opinions. In this case, the bank will not sell for less than this price unless the home remains on the market for a long period of time. Before your offer gets to the bank, in most cases the offer is going to need the blessing of the listing Realtor because some short sales are in pre-foreclosure and time may be short and precious time may be wasted if an offer goes to the bank that has a slim chance of success. The bank will only work one short sale offer at a time, so it is in the best interest of all parties that the offer that has the most chance of success end up being the offer that is forwarded on to the bank for approval.

Keep in mind the following when purchasing a short sale:

Make sure that you find out if the currently homeowner has paid the HOA dues current! The banks generally will not pay more than the equivalent of 12 months dues. Once the dues become delinquent, the association will usually seek the help of the attorney and a $325 past due balance can quickly grown to over $5,000 or more and the bank won't likely pay it, and the homeowner usually can't because they have a financial hardship. Always ask the question if the association dues are paid current.

Three other items to be aware of, at least in the area I sell homes, the buyers are being required to turn the utilities on for inspections. This should be disclosed to you, but I have found that many times the listing Realtor is not disclosing this. This will require YOU to put up the deposits and pay the expense of turning the utilities on. Once last item, make sure you ask if there are any outstanding assessments that have not been paid that the seller may be unable to pay, like a road pavement assessment or special assessment. Find out if there is a negotiator fee. It is not uncommon for there to be a negotiator fee, however, you should know what that up front. Everything related to the transaction should be listed on your HUD settlement statement - no outside deals.

Best Wishes!

Sincerely,

Fred Strickroot, Realtor®, MBA, CDPE
HomeNet
Florida Lic. Real Estate Brokerage
2154 Seven Springs Blvd, Suite 103
Trinity, FL 34655
1-888-864-2758
727-478-8997
homenetyouteam@homenet.us.com
http://www.homenetyouteam.com
1 vote
Dallas Texas, Agent, Dallas, TN
Wed Aug 12, 2009
Yes they do however many factors come into play when a bank accepts an offer. Have your buyers agent discuss all those particulars.

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0 votes
George Sente…, Other Pro, Bridgeport, CT
Wed Aug 12, 2009
Lisa it is possible that the bank will accept a lower offer, they usually wait to see how many offers they will get
and go with the highest offer, although you might have to wait 4-5 months if your offer is accepted, and then it is not final till closing day wich may never take place.
My advice to you is get a home inspection for any house that you buy especially foreclosure or short sale there may be damages that may not make it a good deal for you, the money you save up front maybe will cost many times more.
If you need a name for Home Inspector let me know
Click on my picture.
Good luck
0 votes
Aileen Kane, Agent, New Port Richey, FL
Wed Aug 12, 2009
Lisa, that can be a tough one. So much depends on the property in question. I have worked a number of short sales for clients and every one is different. Sometimes they are “approved” short sales where most if not all of the work is done and the listing/asking price is what the bank will accept. Sometimes they are newly listed short sales so the home may be listed at a below market price to get the ball rolling. Sometimes they are listed accurately to reflect the market. The best way to find out is to put an offer in on the property. You need to be prepared to wait – sometimes months (I have one that has been out there for 4 months now with no answer from the bank). If your agent can find out how the property is situated then you will be able to price your offer appropriately.
0 votes
Bill Eckler, Agent, Venice, FL
Wed Aug 12, 2009
Lisa,

When considering "short sales" it is important to consider that there are two ownership components that need to approve the sale price.....the present owners and the bank(s).

Because of this prices for short sales are tied closely to the appraisal value. It's possible the bank could accept less but only with the approval of the owner.

Good luck
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