Civil Engineer · Oceanside, CA · Member since 2015 · 4 posts · 0 votes
I'm looking at a single family house in SoCal that is listed on the MLS as a short sale for $700k. It just recently dropped in price from $745k. It has been on the market for 200 days or so. How low of an offer is appropriate for this type of sale? I know that Short Sales can take months to close, what are other problems with short sale deals? Any help will be appreciated.
To answer your question one needs more information. First one starts by asking the following: “How much could one sell the property after fixing it up and pricing the property to sell within 30 days.” Once that figure is established then one subtract following costs:
1.Sale Cost (Commission and escrow)
2.Carrying cost (Loan cost)
3.Fix up cost
4.Desired Profit
5.Purchase escrow cost
After one deducts all the above costs from the projected sale price one ends up with recommended purchase price.
There really is no set price yet. First step is that the seller must agree, which they likely won't do if it's a price they don't think the bank will accept (near FMV). Second, and more importantly, the bank must agree to the price, after they get a BPO. If there is more than one mortgage, or other junior liens to be satisfied, it becomes more difficult.