BiggerPockets

My formula is this:

ARV = ?
minus 85% = starting point

starting point = ?
(minus) repairs = ?

My offer is 70% (=) after repairs

Of course, I do my absolute best at influencing the BPO to come in at the price point of (starting point - repairs)...so my new offer will end up being:

BPO = ?
minus 80%
minus repairs = end offer price

1st always takes a hit....

Hello, this is Tonya from Texas.

If you can prove to the Lender why you offered such a low ball figure then you could be in. You need to justify the difference. Perhaps you can write down the estimated cost of advertising the property once it has been repaired, the repairs that the property currently needs and the cost of each repair and the lender could very well agree to it. In all honesty, you need to purchase a short sale course and learn about the in and outs, do's and dont's before trying to attempt this. There is much to learn about short selling but it's fun and easy when done right. Best wishes and Happy Success~

We are willing to go up to $46k - it's all remdeled, need some painting and some misc. est. expense $1k.
You could turn it around and sell it for $75k and get it.

I offered $40k to start off with and will go to $46k the listing realtor laughed and said no way.

I am west of you in the midwest,,,no actual experience BUT I see too much strength in the RE market to get those figures thru.

Might want to consider a smaller profit margin ,,,everybody else is!!(around here)

I saw a BAD REO a month or so ago a bank turned down 3 times more than I would even offer,,,in my opinion there was WAY too much hidden water damage,yet to be discovered!!

Low ball offers dont go as far here as the coasts,,,just the way it is these days. BUT I do agree,either you buy them right or walk on by!!

With any investment offer, you have to have a strategy in place.

Know what houses in close proximity are selling for in four months or less. Use comps that are within 10% square footage range and with similar amenities (parking, architecture, finished basement, etc). Look at comps that sold low to state your claim to the bank. And look at high comps for your ARV.

Know how much work the property needs. Take pictures if necessary to state your case on why the price needs to be lowered. Many realtors do not know how much repairs cost, with labor and materials.

La Tonya has a great point of highlighting what it will take you to sell the after product. Advertising, Listing Broker, holding costs, etc.

If trying to give a low offer, there needs to be other factors in your favor. Every property, lender, and realtor are different, you have to try your hand at cracking the combination. Like previously stated, a bank will decide what type of hit they can and will take. If the property is a gem, the BPO will reflect that and they are not likely to give it away. You have a better chance at getting a steep discount on a short sale if there has been little to no offers on a property; which proves to the bank that something is wrong with either the property and/or the price.

The biggest thing is knowing what you are willing to pay for the property. If the offer does not get accepted, than just walk away. But, if you send out too many offers that never get accepted, than maybe you need to reevaluate your strategy and pricing.

Good Luck!

Number one rule: Don't make offers on listed properties unless the agent understands the short sale objective.

Many agents do not understand that when the seller needs to avoid foreclosure, price is not the main objective. Finding a buyer who is willing to wait and one that can close is priority one.

We put the offer in on the 13th of February. Last Friday on the 20th Country Wide called the agent and requested all the paperwork I signed. They have not gotten back to us yet, but I know this is a slow process, but if they were totally not interested in my offer I don't know why they would ask for all the paperwork.
I did an earnest check of $10k and they only required $1,000 - I thought this would show them we are serious (Might be wrong but who knows). It is also listed that we are paying cash - don't know if this helps or not.
So Country Wide is hard to deal with... great!

I prefer working on the buying side of a short sale listing.

But the previous posts are right, hopefully the agent has experience with short sales and working with banks. An experenced listing agent has a negotiator working with them that works specifically with the bank. Whereas the listing agent is looking out for the interest of the seller.