We are currnetly in the process of a short sale. The CMA for our area at this time is $175,000 at the high end.

Asked by Northside, Niles, IL Wed May 4, 2011

We listed our house at $175,000 and received an offer for $175,000 the first week. This buyer is putting down 35%. Our balance on the mortgage is 267,000 and now the bank says they want the listing price at $205000. What percentage of the balance will the bank accept? Any input would be great. Thanks

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Ranj Mohip’s answer
Ranj Mohip, Other Pro, Chicago, IL
Thu May 5, 2011
It seems that the bank feels that your house is worth more than you think it is. Did your agent give the appraiser (or BPO agent) the CMA of $175K when the appraiser/BPO agent came to your house? You can either tell the buyer that the bank countered at $205K or you can challenge the appraisal/BPO. Banks typically want to net 80% of the current value--the prior balance is irrelevant.

The information in this answer is general information and is not intended as legal advice, nor do I intend to create an attorney-client relationship with any reader by answering this question or otherwise contributing as a member of Trulia.com.
Web Reference:  http://www.ranjmohip.com
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Cathi Weaver, Agent, Chicago, IL
Wed May 4, 2011
The bank is the one who makes the decision, so if they say they want $205k, then that's what it needs to be. Now, if the closed comparables don't warrant that price then your agent needs to be aggressive with the bank and show the comps to them because ultimately, no buyer will get financing for a price more than what the property is actually worth in this present market.

When I represent a buyer in a short sale situation, I always inform my client of the fact that a listing agent may have priced the home lower than what the bank wants. Some of the reasoning behind that is that they are throwing out a fishing line with hopes of "hooking" someone in order to get the short sale process started. So, as the buyer's agent I need to look at what the value is and let my client know that the bank will very likely come back with a higher price and they need to be okay a higher price or we don't put in their initial offer.

In the fall, I had the bank come back asking for $20k more than what my client was offering. There was no way the property should have been $20k higher especially being a distressed property. We pushed and provided comps and asked the listing agent to keep going back to the bank, ultimately we came up $1500 since we were asking for that in closing costs and that was it. The bank settled on that and my client closed 11 months after the initial offer was submitted.

It is not a fun or easy process, but if the bank is willing to forgive the difference of what you owe and what it sells for, you are in a better position in the end.

I wish you the best!

Cathi Weaver
Keller Williams Realty Partners
Park Ridge, IL
Web Reference:  http://www.CathiWeaver.com
0 votes
Eli Givoni-S…, , Boca Raton, FL
Wed May 4, 2011
If the bank told you already that they will take $205K, then that is the price they want. There is no rule of thumb for what the bank will take. You need to listen to their specific requests. We are a professional short sale service and would be happy to explain the process to you. Please call us directly to discuss your specific situation. Our services are FREE to homeowners. We look forward to hearing from you.

Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states

MARS Disclosure for General Commercial Communications
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
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