i'm putting an offer for a townhouse that is listed as short sale. At this market, how much markup (%) should I offer to win the contract?

Asked by 1homebuyer, Logan Circle/ Shaw, Washington, DC Mon Apr 26, 2010

THANKS!

Help the community by answering this question:

+ web reference
Web reference:

Answers

4
Robert Pratt, Agent, Chicago, IL
Tue Apr 27, 2010
There is a lot more for you to consider in this process than mark up. In fact, if you mark it up too much the bank will ignore your offer (unless you are paying cash). Just read an awesome article on Multi-Offer Strategy for Short Sales and Foreclosure properties. It covered a lot of bases and was written with a lot of tips and things that most buyers (and i'm sure a lot of agents) didn't know.

http://www.thechicago77.com/2010/04/short-sale-and-foreclosu…

It's a quick reed and it is highly recommended that you educate yourself about the strategy of a multi-offer situation; especially with short sales. There is a lot to know and because of the learning curve with a lot of agents you can't always depend on your agent to know the ins and outs of this form of sale/purchase.

Best of luck!
Dreamtown.com
Web Reference:  http://www.dreamtown.com
0 votes
Kelly Putz, Agent, Fairfax, VA
Tue Apr 27, 2010
Hi there,

I'm gonna take it on faith that you are already working with a Realtor® and are just looking for more outside advice on this one.

Your question is a little vague, so I hope I'm answering it properly. If you're asking how much over asking price you should offer to win the contract, that depends on several factors, the primary one being - are there any other offers on the house? If there are none, then I would wager that anything over list price would win the contract because the bank would be making out better than what the owner was hoping to get.

I am not a lawyer, and the following is only my opinion from previous experiences:
Now, if the owner hasn't begun negotiating with the bank yet, that's a whole other kettle of fish and will be a drawn out process with the bank, but keep in mind that, even though it is a short sale, once you have a ratified contract - that means both you and the OWNER, have signed all contracts - then no one else can legally come in and put a contract on it and the owner cannot seek other contracts - even if the bank hasn't approved the short sale yet. The bank has to approve the short sale for the owner because of their mortgage on the house, but the bank does not own the house. AND, even if the bank doesn't approve the short sale, the owner can technically still sell the house in a short sale, but will still owe the bank the rest of the mortgage they took out. The bank only takes possession of a house in a foreclosure and that is the only time they have a true say-so in the sale of a home.
0 votes
Arthur Hardy, Agent, Beltsville, MD
Tue Apr 27, 2010
Given how complex the short sale process can be you need a realtor who is certified and trained in doing these transactions. Your approach is not the way to go about it. The assumption that the lender that owns the home will simply take the best offer is not necessarily the case. They may hold your offer while still accepting other offers. By law they should not be able to do this but many lenders do it anyway.
Your offer needs to be your best offer based on what you have qualified for AND are comfortable with should your offer be accepted. One reason why so many homeowners who are in trouble now is they fell in love with their first home purchase and did not consider the long term costs of their purchase.
I cannot urge you strongly enough to work with a realtor who has worked with short sales and new homebuyers.
If you need more detailed help please feel free to contact me further.

Arthur Hardy

W.C. & A.N. Miller

4910 Mass. Ave NW, Suite 119

Washington DC 20016

202 362-1300 Office

202 895-2860 Direct
0 votes
Jason Skipwo…, Agent, Washington, DC
Mon Apr 26, 2010
Do you have an Agent respresenting your interest in your purchase? If so, he/she should be able to properly advise you. If not, you should have your own Agent. Buyers often think they can get a better deal without an Agent. This isn't typically true, especially dealing with a short sale.
0 votes
Search Advice
Search
Ask our community a question

Email me when…

Learn more