How low can I haggle a short sale?

Question

I'm interested in a property that is listed as a short sale for $30k...  It needs some love.  My understanding is that the bank needs to approve the amount.  How much are banks willing to negotiate?  I understand they are not in the business of real estate and want to get rid of the property, so how much can I use that to my advantage? Or when they set an amount, that's it?

Wayne Brooks · Answer

Just to clarify.....in a short sale the listing price is Not the Bank's asking price.  It is the owner's asking price, which may have no bearing whatsoever to what the bank may accept.  The bank likely doesn't even know it's for sale.

Justin Stamper · Answer

@Suzanne Mark we need to educate all of the banks! the garbage they try to feed us is insane.

Suzanne Mark · Answer

Hi

For what it's worth, the way I set the short sale price on my listings has nothing to do with what the owner wants. He/she/they already know they are upside down so they are looking for ME, the experience agent working to market, to prove to the bank that x amount of dollars is all they'll get, based on recent sales. And that market amount is less than what they owe which is why a normal sale won't work for them.

So ...on the other side, as a buyers agent when dealing with a short sale I do the same. When I present an offer lower than asking price I submit recent sold comps supporting that number. Mainly because a bank may be up north (I'm in Central Florida market) and on paper they may poo poo it because it doesn't look right to them in their market. So respectfully I educate them on my market this way.

Hope that helps :-)

Lucas Machado · Answer

@Arthur Leao There are two short sales: (1) approved short sales - the bank has already agreed to the price; (2) unapproved short sales - the owner has set the price and upon reaching an agreement with the owner/listing agent, it must be presented to the bank for approval.

I'm not sure there is a "one size fits all" statement that can be made regarding how far a bank is willing to go on the price.   We've done short sales where the bank has come down 20-30% from listing; I've also seen listings for approved short sales where the bank is absolutely firm on price.

Submit your offer and see the response.  That's the best way to tell.

Bishoy Girgis · Answer

@Arthur Leao my apologies i thought you were talking about foreclosures.. but it works roughlyyyyy the same jus as mentioned price is set by agent n owner but there usually looking for around that

Bishoy Girgis · Answer

Hi @Arthur Leao i do most of my business in florida so my info might not directly be the same to your area...most banks want to get AT LEAST 80-85% of there asking price so you want to give them about 75-80 and see if they'll accept or they might counter abit higher and you can work out something that works for the both of you some banks of course will want a higher percentage and some lower depending on inventory and other factors...All this ratio talk is based upon the asking price being right for the market of the property because you dont want to pay 80 percent of asking while having that value above the market value if you know what i mean....your trying to get it below market value to make a some money off it

hope that helped abit and best of luck with this property man

Arthur Leao · Answer

Gotcha.  Thanks!

Wayne Brooks · Answer

You won't know until after you are in contract, and the bank then evaluates the contract submitted.  The listing agent may know if they've already been thru the process once.  The listing price was set by the owner and agent, not the bank.

How low can I haggle a short sale?

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