Short sale question
Investor · Brooklyn, NY · Member since 2026 · 1 post · 3 votes
Hi Everyone,
I'm very new to the real estate investing game. Recently saw a property near me on zillow that was selling very cheaply compared to the comps. Upon further looking into it the property is a short sale listing subject to third party approval. My question is does the price set by the seller mean anything in a short sale because the bank can just deny that price and ask significantly higher.
Thank you
@Eitan Glucksman, I've dealt with some short sales as an agent. A few thoughts:
1. In my experience the listing price does not reflect much that is useful. When I have represented a short sale listing, we usually INITIALLY listed it for what it would take to pay off the mortgage and have the seller walk away with $0 basically.
After listing it at that price, we work to get the lender to approve the short sale. They will look at whether the seller has an inability to pay and whether they believe the eventual market sale price will be lower than what it will take to pay off the mortgage.
2. In my experience, after a short sale is approved, you start adjusting the list price to attract more interested buyers.
3. The lender often will not give the listing agent any clue what they might accept for the property! They usually won't even give input into the listing price.
I think they want to see that the listing price and any price reductions reflect that the agent is trying to get the most they can for the property.
4. Be prepared to wait! It varies a LOT, but sometimes the lender takes a long time to respond to an offer. If you are lucky it might only take a week but I have seen it take 4-6 weeks to simply get an acceptance/denial for an offer. Ask the listing agent, they make have some idea what that lenders process is like.
5. Its like anything else, there could be multiple bidders! So, it may well go for more than the listing price! It used to be a common tactic back during the great recession to price a foreclosure LOW LOW LOW to get buyers to come and make offers and they get them to make their highest and best KNOWING there are 10 other offers. The property would go under contract FAST and for OVER asking price.
@Eitan Glucksman, I've dealt with some short sales as an agent. A few thoughts:
1. In my experience the listing price does not reflect much that is useful. When I have represented a short sale listing, we usually INITIALLY listed it for what it would take to pay off the mortgage and have the seller walk away with $0 basically.
After listing it at that price, we work to get the lender to approve the short sale. They will look at whether the seller has an inability to pay and whether they believe the eventual market sale price will be lower than what it will take to pay off the mortgage.
2. In my experience, after a short sale is approved, you start adjusting the list price to attract more interested buyers.
3. The lender often will not give the listing agent any clue what they might accept for the property! They usually won't even give input into the listing price.
I think they want to see that the listing price and any price reductions reflect that the agent is trying to get the most they can for the property.
4. Be prepared to wait! It varies a LOT, but sometimes the lender takes a long time to respond to an offer. If you are lucky it might only take a week but I have seen it take 4-6 weeks to simply get an acceptance/denial for an offer. Ask the listing agent, they make have some idea what that lenders process is like.
5. Its like anything else, there could be multiple bidders! So, it may well go for more than the listing price! It used to be a common tactic back during the great recession to price a foreclosure LOW LOW LOW to get buyers to come and make offers and they get them to make their highest and best KNOWING there are 10 other offers. The property would go under contract FAST and for OVER asking price.
Completely agree with @Kevin Sobilo the short sale process takes patience. Sometimes the bank won’t respond waiting for other offers to come in and other times it just sits. It really determines the banks motivation. First the seller needs to agree to the offer and then the bank has to agree. I’ve waited up to 15 months and other times a few days.
The positive side is compared to foreclosures where somebody is living in the house, if repairs are needed they are typically cosmetic. We never j ow till we do a walk through.
If the price is low compared to comps make an offer, you can always remove your offer during inspection or attorney approval contingency time frame.
Hi Everyone,
I'm very new to the real estate investing game. Recently saw a property near me on zillow that was selling very cheaply compared to the comps. Upon further looking into it the property is a short sale listing subject to third party approval. My question is does the price set by the seller mean anything in a short sale because the bank can just deny that price and ask significantly higher.
Thank you
On my first short sale, years ago now, it took 12 months for the bank to accept. The property was in foreclosure all that time. They eventually accepted my initial short sale offer, after 12 months of adding additional unpaid payments. It was the same amount. It made no sense, but sometimes there is a monetary or legal reason for banks to wait. (Some loans are insured or they can't find the original documents or the property is in a lawsuit, etc) You just never know.
My story is about the same as Ken’s. It’s probably been 10 years since my last short sale. (I truly can’t believe there are any today. We have to stop allowing such small down payments.)
Anyway. I offered list and the offer was “accepted” by the seller and their agent. We asked for a progress report every month. A little over a year goes by and the bank responds at DOUBLE the initial list price. I respond with that’s insane, but I will give you another $50k. They respond with never mind, we’re cancelling your offer as you declined our counter offer and putting it on the market. They ended up accepting just a little less than the new list price.
I think I closed on 3 of the 20+ short sales I offered on. They were good deals because the banks had only rules/standards they went by, no emotions. Plus, owner occupants were out of the picture with 6-18 month lead times.
Ps. I got the bank to pay off a $15k sid/lid city improvement assessment just by clicking a box on the offer form. They either didn’t notice, didn’t care, or thought it was standard procedure. My biggest win.
But yeah, the original offer price means NOTHING. Feel free to get your offer in and be first in line to negotiate. Because NO original offer is accepted as is on a short sale. The bank always counters, even at the same financial terms. They need you to agree to extra legal terms about the seller not receiving any money and other conditions, on their forms.
Ive been specializing in selling short sales for almost 20 years. The listing price is just that. It should reflect market value. Once a contract is entered into the lender will process the short sale (expect 2-3 months) As part of the approval process the lender ordered an appraisal of the home - which will generally come back at market value. That is the number the lender uses to determine whether they approve or not and there is usually a small margin.
@Minna Reid Would the same thing described above play out for a property that's underwater with a HECM (reverse mortgage)? You gave me some advice in my forum post last week.
Not to hijack this thread but here's the quick numbers; market value $70-90k (distressed), $50k renovation, ARV $185k, but HECM loan of $166k + interest.
It seems like a lifeline offer from an off market investor (I guess that's unlikely) or a foreclosure/auction are the only options left given what @Ken M. is saying. In 2026 are banks just denying offers, waiting, denying, waiting, and then sending them to auctions?
That true for all short sales including reverse. Property conditions will contribute to its market value. The appraiser will consider repairs. Its best to provide quotes to the appraiser though so they don't have to guess. Your best bet for properties to appraise well below market is when they need significant work.
That true for all short sales including reverse. Property conditions will contribute to its market value. The appraiser will consider repairs. Its best to provide quotes to the appraiser though so they don't have to guess. Your best bet for properties to appraise well below market is when they need significant work.
That true for all short sales including reverse. Property conditions will contribute to its market value. The appraiser will consider repairs. Its best to provide quotes to the appraiser though so they don't have to guess. Your best bet for properties to appraise well below market is when they need significant work.
Ken, you're talking about REOs not short sales. They are two different things FYI. Short sales cannot be bought off market, except in rare cases of hecm sales to heirs. Short sales are not bought from the bank.
That true for all short sales including reverse. Property conditions will contribute to its market value. The appraiser will consider repairs. Its best to provide quotes to the appraiser though so they don't have to guess. Your best bet for properties to appraise well below market is when they need significant work.
Ken, you're talking about REOs not short sales. They are two different things FYI. Short sales cannot be bought off market, except in rare cases of hecm sales to heirs. Short sales are not bought from the bank.
That true for all short sales including reverse. Property conditions will contribute to its market value. The appraiser will consider repairs. Its best to provide quotes to the appraiser though so they don't have to guess. Your best bet for properties to appraise well below market is when they need significant work.
Ken, you're talking about REOs not short sales. They are two different things FYI. Short sales cannot be bought off market, except in rare cases of hecm sales to heirs. Short sales are not bought from the bank.
i've been doing these for 20 years. It's been the bulk of my business that whole time. I've closed hundreds. I know every investor guideline and calculation there is. You are not buying short sales off market without realtor assistance. No investor is allowing short sales without MLS exposure. Maybe a one-off portfolio note but that would be rare.
That true for all short sales including reverse. Property conditions will contribute to its market value. The appraiser will consider repairs. Its best to provide quotes to the appraiser though so they don't have to guess. Your best bet for properties to appraise well below market is when they need significant work.
Ken, you're talking about REOs not short sales. They are two different things FYI. Short sales cannot be bought off market, except in rare cases of hecm sales to heirs. Short sales are not bought from the bank.
i've been doing these for 20 years. It's been the bulk of my business that whole time. I've closed hundreds. I know every investor guideline and calculation there is. You are not buying short sales off market without realtor assistance. No investor is allowing short sales without MLS exposure.
That true for all short sales including reverse. Property conditions will contribute to its market value. The appraiser will consider repairs. Its best to provide quotes to the appraiser though so they don't have to guess. Your best bet for properties to appraise well below market is when they need significant work.
Ken, you're talking about REOs not short sales. They are two different things FYI. Short sales cannot be bought off market, except in rare cases of hecm sales to heirs. Short sales are not bought from the bank.
i've been doing these for 20 years. It's been the bulk of my business that whole time. I've closed hundreds. I know every investor guideline and calculation there is. You are not buying short sales off market without realtor assistance. No investor is allowing short sales without MLS exposure.
Good for you but it's not happening with short sales.
That true for all short sales including reverse. Property conditions will contribute to its market value. The appraiser will consider repairs. Its best to provide quotes to the appraiser though so they don't have to guess. Your best bet for properties to appraise well below market is when they need significant work.
Ken, you're talking about REOs not short sales. They are two different things FYI. Short sales cannot be bought off market, except in rare cases of hecm sales to heirs. Short sales are not bought from the bank.
i've been doing these for 20 years. It's been the bulk of my business that whole time. I've closed hundreds. I know every investor guideline and calculation there is. You are not buying short sales off market without realtor assistance. No investor is allowing short sales without MLS exposure.
Good for you but it's not happening with short sales.
That true for all short sales including reverse. Property conditions will contribute to its market value. The appraiser will consider repairs. Its best to provide quotes to the appraiser though so they don't have to guess. Your best bet for properties to appraise well below market is when they need significant work.
Ken, you're talking about REOs not short sales. They are two different things FYI. Short sales cannot be bought off market, except in rare cases of hecm sales to heirs. Short sales are not bought from the bank.
i've been doing these for 20 years. It's been the bulk of my business that whole time. I've closed hundreds. I know every investor guideline and calculation there is. You are not buying short sales off market without realtor assistance. No investor is allowing short sales without MLS exposure.
Good for you but it's not happening with short sales.
Sure bud lol
In a short sale, the list price is often more of a marketing tool than a firm number. The seller can agree to your offer but the lender has final approval and will typically order a BPO or appraisal to determine what they are willing to accept. If the offer is below what the bank believes is market value, they can counter or deny it. Just be prepared for longer timelines and some uncertainty in the negotiation process.
In a short sale, the list price is often more of a marketing tool than a firm number. The seller can agree to your offer but the lender has final approval and will typically order a BPO or appraisal to determine what they are willing to accept. If the offer is below what the bank believes is market value, they can counter or deny it. Just be prepared for longer timelines and some uncertainty in the negotiation process.
Hey Eitan,
In a short sale, the seller's listed price is just a starting point. It signals their ask, but the bank (lender) has the final say since they’re forgiving the shortfall. So yes, the lender can absolutely counter higher if their valuation comes in above your offer. Exactly what others mentioned - patience is key with short sales. Also keep in mind:
- Expect a long timeline (often several months)
- Approval is never guaranteed, even after seller acceptance
- The bank will usually order their own valuation (BPO/appraisal)
- You may have limited leverage if there are multiple offers
If you have any follow-up questions, feel free to reach out. Happy to help. My DMs are always open!
In a short sale, the list price set by the seller and their agent serves primarily as a marketing tool to generate initial interest rather than a guaranteed purchase price, because the underlying lender must ultimately approve any transaction where the proceeds fall short of satisfying the outstanding mortgage balance. Even if your offer matches or exceeds the Zillow listing price, the bank's internal loss-mitigation department or designated asset manager will order a comparative market analysis (CMA) or BPO (Broker Price Opinion) to independently evaluate the property's true market value, meaning they can—and frequently do—counteroffer at a significantly higher figure or reject an unacceptably low bid altogether. Consequently, navigating short sales as a newcomer requires patience and realistic underwriting, as the approval timeline can stretch across several months and the final sales price is entirely subject to what the lender deems acceptable to minimize their financial loss.