Home Buying in Miami>Question Details

Anonymous, Home Buyer in Miami, FL

I am a first time home buyer and now that the market is in a down spiral here in South Florida, I figure now

Asked by Anonymous, Miami, FL Sat Jul 5, 2008

is a good time to buy a home. I am interested in a short sale property currently listed at 210K. My realtor noted that the property was bought two years ago for 290K and the current owners owe 260K on their loan. Doing some more research on the county's property appraiser website, I found that similar homes within the same home owners association sold for an average of 225K in the past year. I am ready to make an offer on this home which is in great condition and has many upgrades. Since the property is already listed at about 93% of the fair market value, how much lower can I go when making my initial offer? I was thinking of making an initial offer at 80% of the fair market value, which would be about 180K. Any advice would be greatly appreciated.

Help the community by answering this question:



Ask yourself, is this the one? If it is, do you want to take the risk of losing the home to someone else who placed an offer that turned out to be a little higher than yours.

The reality is, if this is an opportunity, other people are viewing it that way as well.

Good luck,
The "Eckler Team"
1 vote Thank Flag Link Sat Jul 5, 2008
Hello Aaron,
Don't be afraid to make an offer regardless of how close to FMV it may be. I always advise my clients to counter-offer and try to work with the buyers even though an offer may seem ridiculous or out of this world. If a buyer and seller agree to a price and if an association (if present) doesn't excercise their right of first refusal (if in condo docs) then congratulations. Unfortunately you are dealing with the banks on a short sale and outside of additional special short-sale documents that are required, you may be waiting several months or longer for a decision especially if the offer is very low.

Basically, the sweet the deal for the lender, the better. But, is it worth it for you regardless of market value, comps, tax records, etc. . . That is it's true value.
Web Reference: http://www.stelsells.com
0 votes Thank Flag Link Tue Jul 8, 2008
You might as well try. The bank can always counter up but it never goes down because you started too high. Be sure to get everything in writing before you spend the money on inspections, etc. There are addendums with short sales you should make sure you have. Good Luck-Pam Mayers-EWM-305-216-5864.
Web Reference: http://pammayers.com
0 votes Thank Flag Link Tue Jul 8, 2008
How are you Aaron? Great question. In my opinion in todays market i wouldnt be shy at all in thinking that you offer would be too low. I deal with many short sales everyday since thats the way the market is now. I think youre right on track with your offer of 180 but i think it wouldnt hurt if you maybe gave a lower offer, maybe 160. If the property was bought at 290k two years ago... a hundred and ten thousand dollar drop is not rare at all. IF you decide to purchase and they accept your offer... IF you have any questions regarding the financing feel free to ask.. Rates are still relatively low and there are loan programs right now that require only 3% down. We are local here on Flagler and 39th avenue. My name is Javier. Good luck!
Web Reference: http://www.leonmortgage.com
0 votes Thank Flag Link Sun Jul 6, 2008
Excellent and well written question! To add my 2 cents; IF, there are no pending offers on the table right now; If the current mortgage balance is $260K try an offer (STRONG OFFER) of 30% less than the mortgage balance- that would be $156K. This calculation comes from some experience. Based on your logical and accurate data, go with $195,000.00

There are a few must haves when submitting an offer on a short sale. I will gladly share my info with you if you like- just e:mail me direct.

BPO Broker Price Opinion
0 votes Thank Flag Link Sat Jul 5, 2008
Hello Aaron,
Congratulations for your choice, it's a great time to buy now.I am working on a short sale right now and we are in a muliple offer situation, i think the closer to the asking price to better the chance you are going to be on the top of the pile (offers) be patent and good luck to you.
0 votes Thank Flag Link Sat Jul 5, 2008
Hi Aaron:
Don't even look at the listing price to make your offer. A lot of short sales are listed below the price the bank will accept because there is no way of knowing what that "magic" price will be until offers come in and the bank does its due diligence (appraisals and research).
Remember that once your offer is in, other offers can continue coming in and the bank will ultimately choose the highest one or even counter above asking if that's what the market calls for.
We are going through a short sale right now where the bank countered higher than listing and there are several offers which we cannot know how high the highest is.
It's not easy and be ready to wait. On a positive note, you may end up with a great property under market value and patience will pay off.
Take a look at this article I did on short sales and hope it helps.
0 votes Thank Flag Link Sat Jul 5, 2008
Short sales are tricky. Don't get emotional about this. Have a 2nd and 3rd choice. You are the buyer and in todays market, you are in charge. I think 180K initial seems low, but what do you have to lose?? Get your agents opinion, follow you gut and ask yourself how much you really want the house. If this is "the house" then the worst that happens is you have to come back with another offer. Sounds like you have done your homework. A lot also depends on your financing. If you are a cash buyer then lower the offer to 170K!!
Good luck. If you need any help, you can email my operations manager at terry@marianschaffer.com
Marian Schaffer
The Schaffer Realty Group
0 votes Thank Flag Link Sat Jul 5, 2008
More facts need to be inconsideration when placing an offer, unless we are realtor who represents you difficult to make a professional comment, in some instances buyers will go over the list price to secure the property for it has equity home they want http://www.lynn911.com if you work positively in concert with your real estate agent I am assured you will have solutions to all of your questions resolved
0 votes Thank Flag Link Sat Jul 5, 2008
The townhouse community is located in East Kendall. I have taken it upon myself to educate myself about buying my first home so that is why I am researching this information as well as my realtor. Your advice has confirmed my research of about 8-10% as being the norm for the list-to-sale ratio. Thanks.
0 votes Thank Flag Link Sat Jul 5, 2008
You are quite correct, that this is the optimal time to buy real estate. It is very hard to answer your question without knowing where the property is, whether it is a single family home or townhouse, etc. Generally, the "list-to-sale" ratio is 8% to 10%, depending on the area, so an offer 20% below asking price is not unreasonable at all. Again, I would need more information.
A big question comes to mind: Why isn't your realtor answering these questions for you? Doing that kind of research and helping you with an offer strategy is his/her job!
0 votes Thank Flag Link Sat Jul 5, 2008
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