Recent comps show similar houses selling for $245K to $250K with approx 150 days on market. I want to make an low offer the shows I'm serious but not too low that shows I don't know what I'm doing. Any suggestion?
Jon said it best. You make your offer on what the property is worth to you.
My initial offer on all my short sales is 50% of fair market value minus repairs. I have never had that offer out right rejected, the bank always counters.
If the bank does reject it, then you simply submit a higher offer. The worst thing that happens is the bank accepts your first offer.
Always submit a HUD-1 with your offer as well detailing how much the bank will net on the deal.
Your offer has to be based on what its worth to you. If the retail value is $250, and you're doing a flip, then its worth $175K less the cost of repairs. If you're going to live in it, it might be worth $250K less the costs of repairs. As a rental, I'd need to know the rent. Unlikely its a good rental, though.
Be serious about making money, not looking serious to the bank. If a ridiculous offer makes money, make a ridiculous offer.
Jon said it best. You make your offer on what the property is worth to you.
My initial offer on all my short sales is 50% of fair market value minus repairs. I have never had that offer out right rejected, the bank always counters.
If the bank does reject it, then you simply submit a higher offer. The worst thing that happens is the bank accepts your first offer.
Always submit a HUD-1 with your offer as well detailing how much the bank will net on the deal.
Recent comps show similar houses selling for $245K to $250K with approx 150 days on market. I want to make an low offer the shows I'm serious but not too low that shows I don't know what I'm doing. Any suggestion?
"Be serious about making money, not looking serious to the bank. If a ridiculous offer makes money, make a ridiculous offer." Thanks Jon, good advice
Regarding the numbers from my original post, do I need to account for these in my preliminary HUD?
Get at least 1 estimate from a licensed contractor (the more expensive the better) and submit the estimate with your short sale package.
If you have a cash offer that will go a long way as well (even if its hard money...cash is cash)
ALWAYS ask for an interior BPO and be sure that YOU are the point of contact. This way, you can meet the agent out there and firmly but lovingly influence the BPO.
Regarding the numbers from my original post, do I need to account for these in my preliminary HUD?
Hey,
The HUD has your offer price, the expenses (closing costs) broken out and deducted from the offer. This number left is the net. That's all the bank will need from you. They will do their own analysis.
Also, who is the bank? A lot of banks do not move the offer to a negotiator (or Phase 2) if the offer doesn't meet investor guidelines. Meaning it is too low to consider. Knowing your banks will come with time, but if you know, you can ask us what our experience has been. Bank meaning servicer and investor. Also this one has FHA MI. They require seller to do HUD counseling 1st. Also, they pay MI claim to the investor. This also comes into the analysis.
If it's worth $250k now, it will be less by the time they get to it. Repairs come into play, but the BPOs are done "as is" value. and "as repaired" value.
I'm with Jon, $175k is good to start with, depending on what else the bank will have to take off for closing costs.
~Mitsu
First, Dave what is your plan for this property? Your exit will play a factor in how high your offers will be able to go.
Secondly, if you look through the many threads on BP on making short sale offers, you will find many different ways. Just make sure YOU are prepared to close with the offer you make.
Thirdly, forget all the figures that come with a payoff. You need to base your offers on what you are willing to pay for the property.