I'm in grand junction Colorado and found a beautiful 2b/3b house that's close to 2k in sq ft. The house definitely needs some attention but it looks like it could be a good deal if you invest just a little work. The carpets are pretty stained, the yard needs spruced up. The back yard needs cleaned and the inside needs some attention too. The listing price is about 256k I talked to my agent and told him that I would offer 247k for the deal. I want to eventually flip the house in about 3-4 years. I'm pre approved buyer going through fha. The owner is about to go to short sale. Is there any room for negotiation during a sale like this?
Short Sales are an interesting beast. You have to get the seller to approve and than the bank. I always try to get the lowerest price. I have found most recently that banks will renovate and try to up the price sometimes, other times they won't. Our key has been to try and see what happens.
You might explore working the owner and asking for the contact info of the people they are working with at the loan servicer. Often there are teams of people working on short sales. If you can help them understand the local market and you strike a deal that eases some of the pain points you might have some luck. Just having your broker submitting offers will likely not get you the result you desire.
In my corporate life I managed a division that provided short sale fulfillment to the large mortgage companies. The list price is somewhat irrelevant to the short sale process from the mortgage company's perspective. If the owner is working to be approved to participate in a short sale program, the mortgage servicer will first make sure they qualify from a financial hardship standpoint, then they will order values (type depends on the type of loan it is, FHA, FNMA, FHLMC, etc.- usually BPOs but sometimes appraisals) and that value will end up determining what offer they will approve.
They may go about 10% below the value, but at this point the mortgage companies are pretty sophisticated in their short sale practices. They should move much faster in making decisions than they used to as the CFPB now requires 30 day decision time frames or they are out of compliance with the regulations. Not to say they always make it but they are trying.
@Eduardo J. Rodriguez so my take on this is that if you are squabbling over $9k on a $250K asking price (~4%) it's not much of a deal. With short sales my advise is to make your offer and keep looking. In about 6 months the bank might call you back and ask if you still want it.
thank you guys! So the market price is 259,900
And is only about 1800 sq ft. Price per sq ft $142.88
3b/2b and 2 car garage
The house is exactly 138 DOM and has the potential to go to short sale.
What is a good way to make a good deal out of this house?
@Eduardo J. Rodriguez In my mind it's pretty simple. You need to decide your exit. Buy and hold or flip. You need to decide how much cash you can put in the deal and what your return and risk will be. From there you can arrive at a price. The best purchases are the ones where there is no emotion. If you can't get it at a price that works move on.
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