San Francisco, CA · Member since 2013 · 18 posts · 0 votes
I am just wondering whether it makes sense for a buyer to give an offer less than the price posted. Based on my understanding of short sale, the posted price is lower than the value of the property when it was purchased. Given that fact, it is highly unlikely that the lender or the seller to agree on a price that is lower than the posted price.
What I meant by 'price posted' is the current sale price (e.g. price listed on Redfin etc). How is the FMV determined?
The list price is just a number that the listing agent and the seller decided to list the property for. It could be high, it could be low, it could be right on the money. Ultimately, once there is an offer and a signed contract, it will be given to the bank, who will do a BPO to determine fair market value; from that, they'll either accept, reject or counter the offer.
I've seen situations where a bank has rejected a contract, saying they want tens of thousands of dollars more and I've seen situations where a bank has accepted a contract and has indicated in their approval that they would have accepted a much, much lower price (and yes, I've seen buyers back out when they realize that the bank would have accepted something much lower).
So, just offer what you're willing to pay, and see what happens...
The previous purchase price is irrelevant. The bank will be looking for something close to FMV. You can start lower, If the seller agree, but you're wasting time if you're shooting for 70% of FMV.
What I meant by 'price posted' is the current sale price (e.g. price listed on Redfin etc). How is the FMV determined?
The list price is just a number that the listing agent and the seller decided to list the property for. It could be high, it could be low, it could be right on the money. Ultimately, once there is an offer and a signed contract, it will be given to the bank, who will do a BPO to determine fair market value; from that, they'll either accept, reject or counter the offer.
I've seen situations where a bank has rejected a contract, saying they want tens of thousands of dollars more and I've seen situations where a bank has accepted a contract and has indicated in their approval that they would have accepted a much, much lower price (and yes, I've seen buyers back out when they realize that the bank would have accepted something much lower).
So, just offer what you're willing to pay, and see what happens...
The list price should be based on current market value. But keep in mind, BPOs can often come in lower than CMV .. and that's where investors make their money.