The Asking price has NO bearing or relation what value the bank may accept. That price was set be the owner/agent.....the lender doesn’t even know it is for sale. The only value/number that matters is the BPO the lender comes up with After they have reviewed the paperwork and contract submitted.
As i@Charlie MacPherson’s example demonstrates......you, the listing agent should have already if they are competent, need to run title to see if there are 2 mtgs, other liens, etc.
This is the only way to project how much, if any, the buyer may need to come up with in Addition to the purchase price, and structure your offer accordingly. I had many buyers prepared and agreed to kicking in $10k or more in addition to the purchase price, and lowered their offer price accordingly.
So if its for 319,900 I can actually go low in general, just no lower than 255,920 which is 80%? Would a personal letter be helpful to add with the offer letter?
@Bola Fdipe You will know whether there are multiple lenders when you run title - but that wasn't the nature of the problem in the case I described on my website.
The first mortgage holder was BofA and the second was Chase as I recall. BofA approved the short sale price with $3,000 going toward Chase's 2nd.
Everybody agreed and signed off, but very close to the last minute, Chase changed their minds and said they wanted a total of $8,500 to release their lien. That meant that my buyers had to come up with $5,500 in CASH to pay Chase at closing.
It couldn't be part of their loan because BofA was still not getting their full amount. Any additional amount on the loan would have gone straight to BofA, up to the amount that satisfied the 1st mortgage amount.
My buyers were still getting a great deal and they had the $5,500 to cough up, so they went ahead and are now very happy in that home, but it was a 9 month process to get them there.
The Asking price has NO bearing or relation what value the bank may accept. That price was set be the owner/agent.....the lender doesn’t even know it is for sale. The only value/number that matters is the BPO the lender comes up with After they have reviewed the paperwork and contract submitted.
As i@Charlie MacPherson’s example demonstrates......you, the listing agent should have already if they are competent, need to run title to see if there are 2 mtgs, other liens, etc.
This is the only way to project how much, if any, the buyer may need to come up with in Addition to the purchase price, and structure your offer accordingly. I had many buyers prepared and agreed to kicking in $10k or more in addition to the purchase price, and lowered their offer price accordingly.
The Asking price has NO bearing or relation what value the bank may accept. That price was set be the owner/agent.....the lender doesn’t even know it is for sale. The only value/number that matters is the BPO the lender comes up with After they have reviewed the paperwork and contract submitted.
As i@Charlie MacPherson’s example demonstrates......you, the listing agent should have already if they are competent, need to run title to see if there are 2 mtgs, other liens, etc.
This is the only way to project how much, if any, the buyer may need to come up with in Addition to the purchase price, and structure your offer accordingly. I had many buyers prepared and agreed to kicking in $10k or more in addition to the purchase price, and lowered their offer price accordingly.
Very interesting perspective Wayne.
Based on the MLS copy, the current estimated value is $316,000 and the listed price is $319,00
You're saying that the owner/agent wants get the most they can so that they don't have to owe much or anything at all to the lender, correct?
What if the owner, as per MLS, is an investor corporation (1 lender), as opposed to an individual?
@Bola Fdipe No, the owner doesn’t care so much usually how much the short fall is.....but, the higher the contract price the more likely the lender will accept the deal, and close it, which is what the owner wants. Don’t trust “what the listing says”, it only takes a few minutes to look up mtgs and liens on a property in most places.
@Bola Fdipe Fund out if the shirt sale is approved at that price. If it is the bank likely won’t take less without a lengthy process, although closing a short ale often takes a ton of time in any case. Long story short be prepared for this deal to take a long time to close. I feel like for the amount of money you are approved for you could find a conventional deal and save yourself a headache but if you really like the house go for it.
@bola You should offer what you are willing to purchase it for. Without knowing the banks valuation it is not clear what the home may be able to be purchased for.
@Allan Szlafrok Saw the house today, was in good condition, I am willing to wait it out. But you're right will still look for conventional deals on the side. Been look for a while, ready to hear "offer accepted!" Thanks for your insight!
@Brett Goldsmith the buyer market is competitive for Newark area, as much as I want to offer between 289-295k, I might lose it if I go too low. :// Delving into your site now! Thanks!
@Bola Fdipe What is your goal with the property? If you don't have an "in" on the deal then you need to feel out the listing agent. The only advice I could give is place an offer what you are willing to pay for it based on your criteria. When i'm trying to get involved in someone else's deal I focus on building rapport and feeling out the situation and asking questions that will determine if they are willing to get me in on the deal at a price that I'd like. If I can't be reviewed at a price I want then I would move on.
First step is getting you offer accepted. The amount owed on the loan, etc means very little IMO. What's important is getting your offer accepted by seller and under review with the servicer. Once the servicer does their valuation more information will come to light.
@Brett Goldsmith to live in and to rent other two units. We are interesting in real estate investments, this is a start for us. Our offer was low compared to the offer they accepted 375k ://. We offered 321.
I like your idea, building rapport with the seller's agent. I tried it after the fact and it was actually insightful.
@Bola Fdipe Yes, it also helps that if you are looking to buy a short sale on the MLS that you ask the sellers agent if they are interested in representing you too. In a world of incentives when you are stepping into the listing agents territory this can be helpful to get a foot in the door.
@Bola Fdipe is your agent also the listing agent? You should find out who is going to represent the sellers and handle the negotiations with the short sale lender(s). You'll want to have an inspection done on the property once your offer is accepted. Just know you will have to be patient, as the process can be quite lengthy.