Residential Real Estate Broker · Lady Lake, FL · Member since 2012 · 4 posts · 0 votes
I am looking at a short sale that the bank has approved a price on of $180,000, which is the listing price. There had been a contract on it which fell through because the buyer's situation changed and he could not close.
I asked the listing agent if the price was negotiable and she responded, "the bank approved $180,000". I assume this means that the previous offer was for $180,000. She said they could close quickly because it was already approved. I interpret this to mean that if I pay $180,000, we could close quickly. I also assume that the listing agent might not be excited about accepting a lower offer because it could mean starting the approval process all over again.
The problem is that $180,000 is only about 5% below market value, as I see it. I would expect to get it at 10-20% below. Does anyone think that making an offer less than $180,000 would be a bad idea? I have time to wait. I don't know who the lender is. I am aware that someone may come along and pay the $180,000, but that is life. "I care, but not that much" - the mark of a good negotiator.
Make whatever offer makes sense for you. The fact that one deal already fell through is reason enough to make a low offer. (I don't believe in "spamming" a low offers to everything on the MLS)
My partner and I just heard back from an agent today that the bank is accepting our offer of 60% of list price. This was one where the bank had already "approved" the list price.
Make whatever offer makes sense for you. The fact that one deal already fell through is reason enough to make a low offer. (I don't believe in "spamming" a low offers to everything on the MLS)
My partner and I just heard back from an agent today that the bank is accepting our offer of 60% of list price. This was one where the bank had already "approved" the list price.
I agree with Ned. A list price is just an asking price. Just because a bank approved an asking price, doesn't mean they arent willing to go lower. If you have a little bit of patience, and willing to wait for a BPO to expire, why not?!?
You can make the offer at whatever price you so choose and just because she said that $180 is "approved" does not mean that is what the bank is going to take.
I suggest you make the offer that you think would make it a good deal for you and in order to strengthen your offer price you can provide the agent with comps that will justify your price.
Short sales are slow and long process. If you submit an offer she has to present that offer to the bank regardless of amount.
If I collect the best comps, they will be defining market value. If I want to get it at 15% below market value, my comps won't justify my offer. Do the banks accept that much of a reduction because it is a short sale?
Roy, there is no definition of what a bank will accept. If it were that easy, people would be abusing the hell out of the system. Bank to bank, day to day, loan to loan... every offer and response will be different.
As others have said. The property has a certain value to you, decide what that is. Make your offer. The bank either says yes, or it says no... at which point you either close, counter, or move on to another property.
Thanks to all. What I don't understand is what good will it do to include comps that indicate a 10%-15% higher value than my offer? The only way I see that it would help is if the bank accepts the notion that a short sale is usually well below market value. Am I missing something?
Ours hasn't closed yet, so still could fall through, but we offered less than listed price, and seems there is a net price the bank will accept at settlement, not a pre-approved listed price, at least in our case. The seller listed it at a price high above that to make sure they were getting the net they needed. So approved may not really mean exactly approved at listed price. We offered what we thought fair, much lower than list. The seller, knowing the net acceptable by the bank, put some of the money he would get as relocation money towards the deal, and the listing agent got the title company to lower fees so they could counter with the absolute lowest price they could take to get the bank their approved net at settlement.
Make your offer on what you feel it is worth -- worst case, they say no and you move on, but they might come back with absolute lowest offer and you can make your decision then.
This is my first short sale experience, although I sold real estate for 14 years as a Realtor as well as an investor. The biggest difference seems to me is the apparent fact that no one seems to know what the other parties know. No one seems to know what the bank will take, and no one knows what arrangements, if any, have been made between the bank and the seller. At least that is what I am hearing. I may the only one in the dark. The other complication is that this house is in The Villages, FL, and that market has not felt the down turn like most of the rest of the country. This makes finding a "deal" that much harder. The house is for me to live in, so I also have to remain unemotional. I shutter to think what a non-Realtor person would think of this process. Maybe that is to my advantage to know how to cope with complex deals. One good thing in my case is that I am licensed in FL and can represent myself and get half the commission. The down side is I don't know how to advise myself very well in this case.
Thanks again for all of your advice.
3 Factors on Shorts
The Bank Doesn't OWN it, they Service the Note-must get permission
Seller agrees, Bank Negotiator adjusts, the Investors MUST approve. (Investor is usually WallSt mortgage bundler)
+The Listing Agents BPO matters only for HIGH CLOSE Rate Agents. My Fav Short Agency has north of 90% Close Rate -and his BPO's are within a very tight margin.
Conclusion: Diligence IS required. Last Short Close I did was Owner Occ on $416k Loan, we bought for $270k - SSA came 5months after MEC. Listing Agency has STAFF running 50+ listings at a time mostly distressed.
->This Example SSA for $180k means you should be able to be "Close" in as little as 45 days, instead of 6-months AT THAT PRICE.
Roy you seem to have answered your own question. It sounds like the bank can sit and wait for the right offer considering it's in a desirable subdivision. You said you can't find comps and or provide a repair estimate that justifies your offer? It sounds like they already approved the short sale price and rejected a lower offer. In my experience with Florida short sales that is the price the bank wants give or take a few thousand and they will probably get it.