what is a good offer price (compared to listing price) for a short sale home? i have been told that sometimes

Asked by Newtoarea, 92563 Thu May 14, 2009

there is a bidding war for these houese, and it is not uncommon to bid higher than listing price. any dieas from anyone?

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15
Kevin and Ju…, Agent, Wildomar, CA
Tue Apr 19, 2011
Newtoarea,

I realize you posted your question a year ago, but thought it was interesting that according to the local MLS, there were 121 sales in 92563 in March 2010, with an average list price of $235,828 and an average selling price of $234,381. In March 2011, there were 119 sales with an average list price of $235,106 and an average sales price of $235,730.
To me the data says that the listed price is generally pretty close to the sales price, and that sales and values are just about the same now as they were a year ago - I hope you were able to find a great home!

Kevin McLaughlin
Berkshire West Realty
2 votes
Veronica Law…, Agent, Murrieta, CA
Wed Apr 27, 2011
Shortsales in my opinion you can get a great home, when it comes to the pricing though it just depends on how the listing agent listed the price for sale. Some listing agents list low to attract more buyers, some list at market. Use an agent and go with the comparables
0 votes
Shanna Rogers, Agent, Murrieta, CA
Mon Apr 18, 2011
Hi Newtoarea,

The best thing to do is have your Real Estate agent do a comparative market analysis (CMA) on the property to see what the true market value is. The Listing Price may be way below market value to generate a 'bidding war'. The reason it is not uncommon for buyers to bid over List Price is because the Listing Agent has the property listed at too low of a price in the first place. With a Short Sale, the seller's lender has to approve the sale price. The seller's lender is going to order a BPO (Broker Price Opinion) be done which is similar to a CMA (which your agent should to - see above). So, if you offer the true market value of the property, your offer is more likely to be accepted by the seller and the seller's lender. The Seller's Lender is going to approve the offer closest to the true market value. This is the reason you should have your agent do a CMA BEFORE you submit your offer.

If you have any questions, please feel free to contact me.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
Web Reference:  http://www.RealtyBySR.com
0 votes
Veronica Law…, Agent, Murrieta, CA
Wed Feb 23, 2011
The basic thing is to get your offer accepted. I would not offer more than the asking price. You need to absolutely trust the agent you are working with to do their job. As the buyer try to focus on getting your requested documents to the requesting parties. If you are not comfortable that your agent is doing their job, then find one you trust and have confidence in.
0 votes
Cheryl Somme…, Agent, Murrieta, CA
Wed Feb 23, 2011
I also disagree with Richard. I have a whole division of my company devoted to appraisal and we have not noted prices falling in the Temecula Valley area. What we have discovered is many active listings have priced themselves too high to start, thus having to reduce their asking price. For awhile prices were actually climbing because of the multiple offers. This being said the short sale prices are all over the place. Banks will most often do two broker price opinions and sometimes an appraisal to try to determine an accurate price. The best way to try to ascertain what you should offer is to definitely run comparables. You do not want to be too high or too low especially when you are going up against multiple offers. Take into consideration that there are many offers coming in that are cash with no concessions also. The bank is going to look at what they are netting. There is no clear cut answer to your question as each home carries with it individual idiosyncrasies that must be taken into consideration when deciding on what to offer. My team would love to help you if you have doubts with your current agent and we can sit down and explain it further.

Cheryl Sommerville/Broker
HomeQuest Properties, Inc.
951-600-0522
619-944-7653 Cell
0 votes
Veronica Law…, Agent, Murrieta, CA
Wed Oct 13, 2010
Your agent should be able to answer this question but my answer would have to be to use the comps for the area as your starting point and add or subtract your method of payment if you are paying cash then negotiate a little more on the listing price and on a short sale I would almost always subtract $8000 less than asking price.
0 votes
Jana Farella, , Murrieta, CA
Mon Aug 10, 2009
Your agent should be able to advise you on what you should offer - you shouldn't offer more then what the current market value is on the short sale. In all reality, it is not good for the Seller to accept the highest and best offer on the short sale, and for the listing agent to submit that to the lender because if that buyer doesn't wait for the short sale approval, then the Seller and the Listing Agent have an approval of the Short Sale that is too high, and they might not be able to find another offer/buyer with similar terms. Sadly not all the parties involved realize that , and all this will just cause unnecessary delays and possible decline of the short pay/short sale.
0 votes
Jane Grant, Agent, Aguanga, CA
Tue Aug 4, 2009
Recent Sold Coparables are the best way to measure what a home is worth.
Bidding wars have nothing to do with what a home will appraise for. Licensed Appraisers rely heavily on recent Sold Comparables". Bidding wars that produce overpriced offers do not appraise and if the appraisal comes in lower than the offer then the contract must be re-negotiated.
Web Reference:  http://www.soreal.biz
0 votes
Janet Ryan, , Murrieta, CA
Tue Aug 4, 2009
The market is very tricky right now. Currently, almost every listing has multiple offers and many go over the list price. It has almost become common practice to offer over listing price especially on Short Sales. How much you offer is also going to depend on how you are making your purchase. Cash is king. Next would be a conventional loan with 15-20% down. Va and Fha loans come after that. A lot of these bank owned and short sale lenders will take a lower cash offer over a higher Va or Fha.

In addition to that, the comps are not a good indicator of how much to offer because there is a serious bidding war going on right now. A good Realtor who knows the market should be able to help you navigate these very confusing waters!
0 votes
Newtoarea, Home Buyer, 92563
Thu May 14, 2009
thanks for the quick response from everyone. i have found that even looking at comparables don't really help me, cos they are all over the board, from $65 per sq to $110. i am definitely buying a home in murrieta, but i want to make sure i get a good deal yet not overpaying for the house i love. what i have also found is that many of my save homes on real estate websites become inactive very quickly, in one case a house was sold after being only on the market for 5 days! (desert oak place) there seems to be some serious competition out there!

another separate question, whats the average cost of completing a backyard landscaping?
0 votes
Marianne Pogo…, Agent, Cape Coral, FL
Thu May 14, 2009
Do your own CMA and determine if it is priced right, then tell your buyer what the offer should be. Our local market REO's and short sale listing prices are sometimes all over the place and I don't like to waste anyone's time on a listing that is underpriced and will get multiple offers pushing the price way up.
0 votes
Richard Gree…, , Temecula, CA
Thu May 14, 2009
The link below is to a list of active listings in the 92563 zip code. The Red down arrow indicates a price reduction. The Green up arrow indicates a price increase.
http://www.mrmlsmatrix.com/Matrix/Public/Portal.aspx?ID=5091860531

Looks to me that there are MANY more red arrows than green arrows. This is indicative of a market where prices are falling. Be very careful when buying in this market.
0 votes
Dianne Hicks, Agent, Rancho Bernardo, CA
Thu May 14, 2009
Hi Newtoarea!
I agree with Richard with the exception of I do not believe prices are falling, in fact they are going up and I definately can back that statement up. That being said until futher instructions, the appraisers are still deducting 1% a month off the price which I believe will be changing soon. You and your realtor have to do your homework for many reasons. Short prices are all over the board, some overpriced and some underpriced. Try to get info from listing agent so it will help you know what is going on with the listing. Check the comps in the area and then decide. You really have to watch it because I have heard some offers after acceptance, have had the rug pulled out from under them. MAKE SURE to include an addendum that they MUST change the status from active if they accept your offer. They are suppose to do this but they often don't. There are many statagies to get the job done so just make sure that your realtor knows what they are doing. There are bidding wars so bring your patience and make sure your agent knows the angles to write a great offer from the beginning! If I can help just give me a call and my partner and I will give you the best we have!
Kindest Regards,
Dianne Hicks
Tarbell, Realtors
(951) 514-5709
0 votes
Jane Grant, Agent, Aguanga, CA
Thu May 14, 2009
Newtoarea:

Yes, there are bidding wars in Riverside County. Recent Sold comparables are a really good way to determine market value in a particular area.

Once you get an offer accepted and you have a completed appraisal it will tell you the exact value for that property. If you are obtaining a loan then the lending institution you are using will not approve a loan for more than the appraisal.

So for example, if your offer is for $250,000.00, and the appraisal comes in at $230,000.00, then the bank will have to re-negotiate your purchase agreement with them, in most cases.

In rare instances the bank can request an additional appraisal.
Web Reference:  http://www.soreal.biz
0 votes
Richard Gree…, , Temecula, CA
Thu May 14, 2009
You'll need to do your homework to figure out what a reasonable value for the home is. You can look at comparable sales but also keep in mind that market values are continuing to fall. Don't offer any more than what you calculate the home to be worth.

If we can help you get perspective on this, we have over 50 years of experience.
Call us at 951-308-1917.

Best regards,

Richard Greenwood, MBA, ePro, GRI, Realtor
0 votes
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