[JimJoe]

I have read up on short sales but I am still confused on what the best price strategy is to make an offer on a short sale home. Some indicate that the offer price is the one approved of by the bank and therefore may be the bottom line, and if you want the house, offer that price and hope the competition does not match it. How likely is it that you will not get the house if you offer below the short sale price?
I also read that short sales take a long time to resolve. I would think that if you put a reasonable deadline in your offer in which it can be accepted, that would solve that delay issue. Will it?
Thanks for your help.
JJ

[Bill-n-Brillo]

Jimjoe, I think the best thing you can do re: the pricing is to just offer what you feel it's worth to you and let it go at that. So many things play into the equation - how long is the bank willing to sit on the place hoping to get the most they can, how much competition is there for that particular property (probably a question you'll never truly know the answer to), and so on. If the house is "the perfect one" for you and you're not willing to settle for another place, then make your offer accordingly.

Re: timeframe for offer acceptance. You can try to put a time for response in your offer but I doubt that will move the process along. You'd like to think it would, though! Generally, you're going to be at the mercy of the bank that's holding the note.

Perhaps you've already done so, but consider looking diligently for other resales that don't have such contingencies (foreclosure, short sale, etc.). Granted, they might be a bit more expensive. But securing your new place won't be such a long, drawn out process.

Bill

[VillagesFlorida]

JimJoe, I don't know a lot about short sales and I suspect that every one is different as to how the bank handles the offer. I CAN tell you a little about the purchase my daughter and her fiance made. In early June of last year they put in an offer on a short-sale home in west Ocala, off Rt. 200. They offered $20,000 less than the asking price. They waited patiently for 5-6 months for word from the seller's bank as to whether or not their offer was accepted.

I learned from their experience that anyone who makes an offer on a short-sale home must be patient. The time that it took for my daughter's purchase to come to closing is not unusual in a short sale transaction. Usually, the seller has abandoned the property and there will likely be defects that you will have to fix once you become owner. In my daughter's case, the seller turned off the irrigation when he left the property, so the lawn died and weeds took over. They will be replacing sod in the near future. Someone stole an expensive part of the piping to the pool pump, no doubt to keep the pump from operating, thereby running up the electric bill. The air WAS left on in the house and the home otherwise was in very good shape when my daughter moved in. In the end patience prevailed and our daughter and her finace got a beautiful home for the money they paid.

[manaboutown]

Friends of mine close the day after tomorrow on a home they are buying on a short sale in Newport Beach, California. They told me several things about their experience. First, find a real estate agent who knows the ropes on short sales and foreclosures. I met their broker. He has sold over $50M in foreclosures since 2009. He represents some investor groups so he brokers a lot of houses. Second, some lenders are easier to deal with than others. Citibank is the lender involved in their case. Their broker finds dealing with Citibank doable. He will not deal with certain lenders who he knows string buyers along. Third, to their surprise, the broker recommended they submit an offer of about $37,000 less than the lender's already low asking price, which they did. The offer took about three weeks to be accepted. The lender required a third party broker valuation (a drive-by appraisal?) prior to agreeing to their price. They lender is also paying the people in the house $20,000 to move out, much of which they spent on a lender funded vacation in Costa Rica. I have seen the house. Other than needing new carpets and inside painting it is pristine.

[Jenna949]

Anyone know how fast sales in Stonecrest are moving?

[mrfixit]

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[mrfixit]

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[jeffy]

First off, in a short sale, it is the owner of the home that has listed for sale. The bank cannot list a home for sale because they do not own the short sale. Probably the list price was advised by their realtor ( hopefully one experienced in short sales ). The owner of the home will probably accept most offers close to the list price. Once the offer is accepted, it goes to the bank for approval. If there is only one loan of the home, that is easiest. You only have to deal with one bank to get approval. It is the bank approval that is hard to get.

I invest in foreclosures in Maryland and have tried unsuccessfully to nab short sales. I have waited as long as six months on a bank to approve a short sale. The bank will determine what the home is worth in todays market and that is what they will be looking to get.

Many realtors dont like to show short sales because of the uncertainty that an offer will go thru in less than months. If you put the purchase is contingient on closing in less than several months, you are even less likely to get the approval of the bank.

A foreclosure is MUCH easier to do. It has gone thru the foreclosure auction and is now owned by the bank ( since no one came to the auction and bid hi enough to meet their minimum ) . If the bank is owed 200k on a home, they will not sell it for 50k at auction. You will usually get a reply on your offer within a day or two with a bank owned foreclosure.

jeffy

[JimJoe]

thanks Jeffy

[linda_sears]

You are actually talking about several different parts of a short sale here. First of all, the asking price may be pre approved or not. Basically, when a realtor takes on a short sale they start listing the house with a break even price. That is the price that if the house sold...the bank would get back what the mortgage is for. From that price, the Realtor drops the price consistently until there is an offer. This consistant reduction shows the back that effort was made to get the best price. Occasionally, once the bank gets the offer - they may reject it and tell the Realtor what price they will accept. At this point the house goes back on the market with an approved short sale price. Therefore, if you find a house that is a short sale, you need to ask...is this an approved short sale price. If so, then offering lower than the asking price is generally a waste of time. If it is not an approved short sale price then you need to as the following questions. How long has it been on the market? When was the last price reduction? Have the price reductions been consistant? Based on these answers you can figure out if you are better off making a full asking price offer or a lower one.

Timing is another issue. If it is a pre approved price then usually the short sale closes much quicker - possibly even 30 days. Some banks are much faster than others in giving approvals. Your Realtor would be able to give you an idea which ones are faster. Lastly, you need to know how many mortgages are on the property. And, which banks each one is held with. 2 different banks - typically takes longer. 1 bank with a mortgage and a home equity line is usually faster. Make sure your Realtor has a designated short sale negotiator that will do the bulk of the work and get back to the bank with the answers as quickly as possible.

Lastly, if you have sold your home...are closing quickly and looking to move in on a specific date...a short sale probably isn't for you.

[linda_sears]

Originally Posted by Jenna949

Anyone know how fast sales in Stonecrest are moving?

It all depends on the price and the marketing. If it is price correctly and marketed agressively....time on market is just a few months.