Tuesday, July 22nd, 2014

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How To Determine a Short Sale Purchase Offer

By Cory Boatright, Shortsaleology Founder

The word “short sale” has certainly been a buzz word in the distressed real estate market we are experiencing in 2008. However many Realtors and investors are still unclear on how to determine a real estate short sale offer that is acceptable to the lender.

The following steps are to be used as a basic guideline on determining what to offer the lender for a short sale acceptance.

Step 1: Determine Fair Market Value (FMV).

The FMV can be determined by evaluating sold, comparable properties in a similar or close proximity to the subject short sale property.

A realtor will have access to the MLS (Multiple Listing Service) and can create a CMA (Comparative Market Analysis) for the subject property. This analysis will identify sold comparable properties with same square footage, bedrooms, baths, garage and other similar characteristics as subject property.

Request the Realtors use a sold time frame within 6-12 months when pulling properties in the immediate or surrounding areas. Usually the short sale lender will not consider any sold comparables that are older than 12 months and that are further away than 2 miles from the location of the subject property.

Step 2: Evaluating sold comps systematically.

Contrary to popular and often misguided belief, you can use a formulaic system to work in your favor when determining what to offer on the short sale property. This system has been around for years, but for some reason you may have not heard of it mentioned dealing with real estate. Here is the system. You will use the law of averaging. The way this works is like this.

Let’s say you have eight sold comparables that are all similar in size, square feet, bedrooms etc. Here is how you apply the formula. You would take out the two highest comps and the two lowest ones and average the rest.

EXAMPLE:

You have a property you think is worth $145,000.

You have a Realtor pull a CMA and you find eight sold comparable properties that match the criteria above.

The MLS shows the following:

$159,000
$154,000
$153,000
$161,000
$148,000
$143,000
$146,000
$151,500

Using our formulaic approach you would take out the two highest sold comparables ($159,000 and $161,000). Then take out the two lowest sold comparables ($143,000 and $146,000). This would leave four other sold comparables.

$154,000
$153,000
$148,000
$151,500

———–

You would then take an average by simply adding up the sum of all the sold comparables and dividing them by the total number of properties left. In this case, that number would be four.

Total: $606,500 divided by 4 = $151,625

You can reasonably justify the house may sell for $151,625 instead of the $145,00 you originally estimated.

Step 3: Revealing the ARV (After Repair Value).

This terminology is slang often used with real estate investors. It is similar to the FMV with a few differences made up by the amount of repairs the investor estimates the property needs in order to sell quickly on the open market using FSBO (for sale by owner) techniques and not using the MLS.

It can be argued the ARV is more of a guess or suggested value derived by using sold comparables from houses that were NOT sold by a Realtor.

One way to explain the difference is a realtor will typically use a FMV and a real estate investor may elect to use an ARV. An appraiser can use both value methods, but generally sticks to the ones that come from off the MLS.In my opinion… the ARV is a less accurate and dependable value than what come off the MLS.

Step 4: Figuring out the BPO.

The BPO (Broker Price Opinion) is perhaps the single greatest value factor the lender will use to determine the acceptance of your short sale offer. Te BPO is KING!

BPO is a generalized opinion or value of a property the lender uses to determine what the short sale property is worth on paper. They are ordered by the lender and sent to a Third Party Company, such as BPO Direct, First America, LandSafe, etc. These companies have a list of realtors for each state. The BPO’s are ordered and conducted by Realtors.

The BPO can be an Interior or Exterior type.

If an Exterior type BPO is conducted, it means the realtor (BPO agent) did not go inside the property to evaluate its condition. This could be due to the homeowner vacating the house or not being cooperative with the BPO agent when requesting a time to come appraise the house.

Dealing with “Pretty House” type short sales (categories later defined), you will find the BPO will typically come in 10-20% lower than FMV or ARV. Based on this, you might consider offering 60% of the ARV or FMV value for your initial purchase offer. Of course, this depends on the amount of repairs needed for the property.

If you have what can be classified as a “Pretty House” short sale, which would show very little needed repairs, don’t expect to get a huge discount from the lender for it. If you cannot JUSTIFY a reason for the lender to accept either a small or large discount … don’t expect them to give one to you.

This also dispels the myth that all houses heading towards foreclosure are good short sale candidates. They are not.

Here are some classifications and examples to make it easier to determine how much of a loss the lender may agree to accept.

Short Sale Classifications:

  1. PRETTY HOUSE
  2. UGLY HOUSE
  3. SCARY HOUSE

EXAMPLES:

Pretty House: (Generally in safe, desirable areas and houses selling fairly quickly)
ARV/FMV: $100,000
REPAIRS: $5-10,000 (5-10%)
BPO: $80-90,000 +/- 5%

Ugly House: (Generally a light rehab or fixer-upper, handyman special house in fair neighborhoods)
ARV/FMV: $100,000 (With Ugly Houses this number tends to be the “as is” value instead of ARV.)
REPAIRS: $11-20,000 (11-20%)
BPO: $80,000 +/- 5%

Scary House: (Generally in areas that are not desirable, massive repairs needed, lots of crime isn’t uncommon)
ARV/FMV: $100,000 (With Scary Houses this value tends to be the “as is” value instead of ARV.)
REPAIRS: $35,000 (21 – 35% +)
BPO: $65,000 +/- 5-10%

You can have a Scary House located in a great, fast selling neighborhood and combination of the others, but generally speaking Scary and Ugly Houses will not be located in excellent neighborhoods. Remember this is a guideline, not an exact science. The BPO agent will generally consider the “as is” value for both Ugly and Scary Houses.

Now let’s discuss the different loan types the lenders will consider a factor per short sale submission.

Step 5: Learning the loan types.

When you learn these, you can increase your closing rate for lender accepting your short sale by as much as 50%! Here’s why: if you know more about any property, it provides you better leveraging and ultimately negotiation strategies to target. Not all short sales are created equal.

Conventional loans.

These loans are found all over the place. They provide the most flexibility especially dealing with short sales. Using the $100,000 example, you might start out your offer submitting 60% x 100,000 (FMV) = $60,000… The $60,000 is actually 70% of the BPO Price. However it is very common to see the lender accepting around 80-85% of the BPO price, which would be around $68,000 – $72,250.

This model can fluctuate a little bit, but this is a common average. The BPO (value opinion also considered the PERCEIVED value of the property) to the lender is the MAIN FACTOR. Therefore in this example if you thought the BPO was going to come in around $65,000 … You would take 82% of THAT number, which would be $53,300. The lender may very well accept $53,300 based on their perception of the value of the property (their asset).

FHA loan.

I repeat: this is not a scientific grading scale. It is the model used by many short sale investors as a guideline. You can and will have other factors that make you stray from this. If you are dealing with an FHA type loan or any government backed loan, they are going to recoup a set amount if the foreclosure is completed.

For example with FHA loans, the insurer will basically guarantee the lender 82% of an FHA Certified Appraisal amount. Notice I did not say BPO. For these loans, you will need an FHA Certified Appraisal for the lender to consider in their evaluation process on the property. The BPO will not suffice on these types of loans. You can massage the numbers 1-2%, but 82% is listed in their guidelines.

There is a compiled list lst that I provide in my home study course. You can go online to find a similar list for free too.

  • All FHA loans are insured by the federal government.
  • As long as the lender follows FHA guidelines, they are guaranteed at least 82% of the “as is” appraised value.
  • FHA-type loans will not use a BPO. Instead they will require an FHA Certified Appraisal. Use the same techniques on the FHA Appraisal that you would for a typical short sale deal.
  • If the debtor is in bankruptcy, no short sale will be approved.
  • If the property was used as a rental for more than 12 months, no short sale will be approved.
  • If the homeowner does not occupy the property, no short sale will be approved. (There can be exceptions to this.)
  • The cooperating lender is eligible to receive $1,000 from FHA for performing a short sale.
  • Seller MUST fill out FHA specific forms for approval. This will include an Application to Participate and a
  • Homeowners Counseling Certificate, all of which the lender will supply in their FHA Short Sale Packet.
  • FHA loans must be at least 30 days past due for short sale consideration.
  • The lender is required to give a copy of the appraisal to the homeowner.
  • The homeowner can receive up to $1,000 directly from the HUD 1.
  • FHA will not go after the homeowner for a deficiency once the short sale is accepted and closed.

VA (Veterans Affairs) loans.

These type of loans have a guarantee of 88% of the appraised value of the property.

  • Designed for veterans.
  • These loans are federally insured.
  • VA guarantees the lender at least 88% of the “as is” appraised value.
  • A VA appraisal is usually automatically ordered once the debtor becomes 60 days past due.
  • The appraisal value can be appealed by the homeowner.
  • The VA will work the homeowner and do everything possible for the homeowner to retain VA benefits.

Note: Absolutely NO BPOs allowed. All VA loans require certified appraisers to determine value.

Freddie Mac loans (FDMC).

  • FDMC will not allow the buyer of a short sale property to be anyone but an individual. This means the buyer on the Purchase and Sale Agreement and HUD 1 cannot be a company, LLC, trustee, or anything of the sort. The purchaser must be an individual name.
  • Freddie Mac will almost always require that the property be listed with a realtor, which means they are going to ask for a Listing Agreement. If the offer nets the lender less than 92%, Freddie Mac will require that the property is listed for at least 90 days before approval will be issued.
  • The lender has the authority to approve short sales at a threshold of 92% or higher. Anything lower than 92% must be approved by Freddie Mac.
  • Freddie Mac has a high customer service standard, which means that if the lender is not responsive to your offers, they are going to want to know about it. This creates another point of leverage to get your offer accepted.

Fannie Mae (FNMA).

  • Fannie Mae has a high customer service standard. If the lender is not responsive to your offers, they may actually step in and take over the short sale negotiation process.
  • The lender has the authority to approve short sales at a threshold of 90-92% or higher. Anything lower than 90% must be approved by Fannie Mae.
  • Fannie Mae rarely requires that the property be listed with a real estate agent.
  • Fannie Mae will allow the lender the authority to approve short sales at a threshold of 90% or higher, but will also allow a heavier discount if needed.

For Fannie Mae, Conventional, VA and FHA short sales:

The buyer can be any entity, company, person or trust (the bank may require written proof of the company or of the trust). Most of the loans that you come across regarding short sales are going to be conventional loans.

Step 6: Memorizing the minimum accepted NET offers (of the BPO or FHA appraisal).

  • VA 88%
  • FHA 82%
  • Freddie Mac (FDMC) 92%
  • Fannie Mae (FNMA) 90-92%
  • Conventional Loans 80% (no set limit)

IMPORTANT: Understand that these are NET percentages to the bank. If you have your offers padded with things like realtor commissions, closing costs and additional fees, these are NOT to be included in this percentage.

EXAMPLE: The BPO on one of your deals comes in $100,000. Offers that may be accepted based on the above criteria would be:

  • VA 88% = $88,000
  • FHA 82% = $82,000
  • Freddie Mac (FDMC) 92% = $92,000
  • Fannie Mae (MNMA) 90-92% = $90-92,000

Something else to consider is this: all LOCAL banks, usually the smaller ones, will almost always NOT ALLOW more than a 10%-15% discount off the property depending on the amount of repairs needed to fix. Local banks tend to be more conservative in their approach to discount the property. This is partly due to the network of local affiliates the bank can call to get more than one opinion of repairs needed or value of the subject property.

Step 7: Dealing with second mortgages and junior lien holders.

If you are dealing with a second mortgage holder, you are basically going to negotiate with them the same way.

You will find that many 2ND Mortgage Holders will not require as much information to make a decision quickly on discounting their loan amount. They will generally order a BPO or have an appraisal on file. It could be older or current. Make sure and ask about it depending on the numbers you find out dealing with them.

Sometimes a lender will actually tell you a BPO price.

Now before you get all excited and think that is GREAT…think again! Typically, they will LIE to you about the price and actually inflate it. Yeah…I know… you never thought lenders lied, did you? Well…they do…and they do it a lot.

When you are dealing with the 1st mortgage holder, it is not uncommon to find out they will only allow $500 – $1000 towards paying off any 2nd Mortgages, Liens, Judgments etc. All lenders are a little different, but the norm is $1,000.

This is another reason why you will deal with more 2ND position lenders that are willing to take pennies on the dollar to satisfy their loans with the homeowner. In fact, you will often negotiate for 80-90% discounts or get approval for 10-20 cents on the dollar! It is can be beneficial if you get the 1st to accept a short sale and then present that information to the 2nd IN WRITING! If the 1st is willing to take a hit, where does that leave the 2nd? This can be a powerful negotiation technique.

Remember any junior lien-holder who is holding an over-leveraged or nearly over-leverage asset (the house) is in a HORRIBLE position. They realize this and if you can build a strong case why it would be in their better interest to discount their holding position rather than risk losing EVERYTHING at the foreclosure auction sale. It will not only generally help them, but it can make you, the investor, a HUGE PILE OF MONEY. Why? You just created equity out of thin air. That is the power of short sale negotiations.

In Closing…

This is probably the most concise definition of putting together an adequate short sale offer ever printed.

The power of this document once put into action can literally make the user of it extremely wealthy. Other real estate home study courses, books, audios etc for the most part leave out what this document dislcosed. It is the “meat” of preparing a satisfactory short sale offer.

There are no more secrets you need to know about doing short sales. I just revealed them all to you. If you take the steps for preparing a short sale offer exactly as shown above and apply them to your real estate short sale business; the sky is the limit for your continued success getting them approved.

Remember…be a servant.

Cory Boatright
Loss Mitigation Specialist
Short Sale Fundamentals
Shortsaleology
Cory Boatright’s Blog

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About 

JP Moses is a roughly-hewn man-child who first got into REI after reading Rich Dad, Poor Dad back in Y2K and went full time in 2002. He's tinkered in everything from landlording to short sales to rehabs to Realtoring to REOs to notes to owner financing, blah, blah, blah...Till he finally stuck his flag deep into wholesaling and has since flipped somewhere north of a couple hundred deals.

JP's not a “guru” but also doesn't think it's a bad word. Among his core values are authenticity, creativity, big honkin' value, general fun-ness and being unshaven. He's super proud to be chief blogger guy at REItips.com and host of the free REIology podcast. He also thoroughly enjoys sharing his 53 best real estate investing forms with anyone who wants them. You should totally check that out. :-)

  • http://www.offplanpropertyexchange.com/ Off Plan Property Exchange

    This is a fabulous article with an amazing level of detail.

    Tomorrow I’m going to link to it from my blog. So please come ane visit.

    Regards,

    Mark

    http://www.offplanpropertyexchange.com – New homes for sale and worldwide property investment opportunities.

  • http://www.offplanpropertyexchange.com Off Plan Property Exchange

    This is a fabulous article with an amazing level of detail.

    Tomorrow I’m going to link to it from my blog. So please come ane visit.

    Regards,

    Mark

    http://www.offplanpropertyexchange.com – New homes for sale and worldwide property investment opportunities.

  • http://heytaylor.blogspot.com/ heytaylor

    Amazing article. I’m going to save it for a long time. Keep em coming!

  • http://heytaylor.blogspot.com heytaylor

    Amazing article. I’m going to save it for a long time. Keep em coming!

  • http://www.mustknowinvesting.com/ Patrick Riddle

    I haven’t seen the minimum accepted net offer percentages before. Thanks for the tip!

    Patrick Riddles last blog post..3 “Vital” Keys to Getting Millions in Private Money for Real Estate

  • http://www.mustknowinvesting.com Patrick Riddle

    I haven’t seen the minimum accepted net offer percentages before. Thanks for the tip!

    Patrick Riddles last blog post..3 “Vital” Keys to Getting Millions in Private Money for Real Estate

  • Allison

    We originally purchased our house for $225 and had a $225K MV.
    We rec’d an offer for $204K from husbands job’s relocation package which expires 8/8.
    I never faxed so much information, more than once applying for a short sale.
    They seem to be stalling so we lose the offer.
    What do you think?

  • Allison

    We originally purchased our house for $225 and had a $225K MV.
    We rec’d an offer for $204K from husbands job’s relocation package which expires 8/8.
    I never faxed so much information, more than once applying for a short sale.
    They seem to be stalling so we lose the offer.
    What do you think?

  • http://www.reitips.com/ JP Moses

    @Allison – If they keep stalling, you may very well lose out. Have you considered asking the mortgage company for an extension? They won’t always grant it, but it certainly happens a decent number of times when asked for. Especially in today’s turbulent market.

    …jp

  • http://www.reitips.com JP Moses

    @Allison – If they keep stalling, you may very well lose out. Have you considered asking the mortgage company for an extension? They won’t always grant it, but it certainly happens a decent number of times when asked for. Especially in today’s turbulent market.

    …jp

  • Marie

    We are “bidding” on a short sale right now. The list price on the house was $139,000. We have since learned that Freddie Mac has the loan. Our offer was $126,000. I never knew of the “minimums” before. Did we bid too low. It has been three weeks and we haven’t heard anything. The listing agent has been called a few times a week – but doesn’t have any new information.

  • Marie

    We are “bidding” on a short sale right now. The list price on the house was $139,000. We have since learned that Freddie Mac has the loan. Our offer was $126,000. I never knew of the “minimums” before. Did we bid too low. It has been three weeks and we haven’t heard anything. The listing agent has been called a few times a week – but doesn’t have any new information.

  • Carmen

    I agree. This is an amazing article. Very informative. You gave us something very valuable for free. Wow!

  • Carmen

    I agree. This is an amazing article. Very informative. You gave us something very valuable for free. Wow!

  • http://www.ShortSaleFundamentals.com/ Cory Boatright

    JP,

    Thanks for article post bro. That is really cool of you. Your site looks great. I will tell everybody I know to come check this out.

    Keep serving brother.

    Remember… be a servant,

    Cory Boatright
    Loss Mitigation Specialist
    http://www.ShortSaleFundamentals.com
    http://www.ShortSaleology.com
    http://www.1DayFunds.com

    P.S. Let me know if I can help you with anything.

    Cory Boatright´s last blog post..Why you can’t do the short sale business

  • http://www.ShortSaleFundamentals.com Cory Boatright

    JP,

    Thanks for article post bro. That is really cool of you. Your site looks great. I will tell everybody I know to come check this out.

    Keep serving brother.

    Remember… be a servant,

    Cory Boatright
    Loss Mitigation Specialist
    http://www.ShortSaleFundamentals.com
    http://www.ShortSaleology.com
    http://www.1DayFunds.com

    P.S. Let me know if I can help you with anything.

    Cory Boatright´s last blog post..Why you can’t do the short sale business

  • Pingback: What are banks looking for in a short sale bid? | Freeze Foreclosure

  • marie

    In your comment… “If the homeowner does not occupy the property, no short sale will be approved. (There can be exceptions to this.)” What are the exceptions?

  • trustQ

    We're in process of buying a short sale property as part of a 1031 Starker exchange. Our soon-to-be-sold property is held in a revocable living trust. So we thought the short sale property then would be purchased with sale proceeds and owned by the trust. But lender suddenly said buyer of a short sale cannot be a trust. Where did that come from and why?

  • http://REItips.com/ jp moses

    Well it's not a universal rule, but lenders started considering that a “red flag” of sorts over the last year or so. Basically they've caught on to how investors use trusts to (often times) skirt seasoning issues…so they're starting to prohibit it. Sorry, man. Have you learned “the option method” yet?

    …jp

  • Delsaintpierre

    This article is very helpful. Working on my first short sale and it's a daunting task at best. I'm doing tons of research, taking short sale courses and asking lots of questions. I have an awesome support system in my office and I get tons of assistance from associates already experience with short sales. I'll be approaching from the buyer side but the process is brutal on either side of the deal. I've heard horror stories from seasoned agents. I tend to be a bit intense and meticulous on details and making sure we're not missing steps. The great thing is that my client is not in a time crunch so closing quick is not a big deal. I'll be getting a professional investment analysis also. I know it may be several months before closing, if we even get to that point…as you all know, there's tons of competition and bidding back and forth on short sales. Huge challenge. :)

  • Ladieola

    A few days ago I submitted an offer on a short-sale. The listing agent told my agent it would be another 30-45 days for the seller to be approved to short-sale. We went ahead and put our offer in…just in case the approval came earlier.
    Just today, five days later, the listing agent called my agent and stated she herself was going to choose the “best and highest offer” to submit to the lender, and we had two days to submit our best and highest offer. Is the listing agent insinuating I need to “up my bid”??? First off, It’s my understanding our state law requires ALL offers to be submitted.
    My agent told her this and she said nooooo. He also told her she is supposed to wait until the Lender calls her and requests the offers. She said the Lender had not called her yet.
    I have lost several bids in the last several months (foreclosures/auctions) so I do not want to get on the wrong side of the listing agent, but how can I get proof my offer was accepted???
    The BPO listed is also the amount I came up with using your formula, so I feel good about the price. The house in my opinion is a “pretty house” in a desirable neighborhood. We offered full BPO price + $1,000, and asking Lender to pay all closing costs. Now I’m second guessing myself but….I can’t really afford to offer more so I’m sticking with my original offer.
    I know it doesn’t matter to the seller what the offer is at this point, as the seller does not receive any of the funds, but doesn’t the listing agent receive a higher commission on a higher offer? I have very good reason to think the listing agent is representing a friend or family member (sellers), and feel something smells rotten in Denmark.
    Again, how can I acquire proof the listing agent submitted my offer…before it’s too late???

  • http://REItips.com/ jp moses

    Hi, Ladieola – great questions. I’m a little short on time, but here are some quick answers I think will help clear things up for you.

    The listing agent does have a fiduciary responsibility to present every offer to THE OWNER/SELLER…but not necessarily to the lender in the case of a short sale. Now it would still makes sense to present them all…the agent’s got nothing to lose really…unless one offer lets the listing agent double dip and get both commission sides, and another doesn’t. Unfortunately that’s often a big reason for a listing agent to lean their seller towards a specific offer…though they’re not supposed to do that.

    I think most likely this agent’s just used to playing the “submit your highest and best” game in order to try and get folks to pony up their best offer sooner rather than later.

    My advice: Don’t sweat it. Like you said already, you know your where your numbers need to be. Stick to them. Don’t let “highest and best” games make you nervous.

    As far as proof your offer was accepted…well if the bank accepts your offer, I don’t see any reason the agent would hold this back from you. And they’d certainly be unethical to do so. I think the likelihood of this happening is very, very low. Again, I wouldn’t sweat it. Just let him/her know you’ve already submitted your highest and best, and you look forward to hearing back from them soon about it. That’s it.

    Hope that helps!

    …jp

  • Ladieola

    Thank you much, jp.
    Haven’t heard anything yet…but not going to sweat it. It is what it is.

  • Ladieola

    Thank you much, jp.
    Haven’t heard anything yet…but not going to sweat it. It is what it is.

  • Lisa

    as a buyer putting in an offer on a short sale, I want to know if I have to use a realtor? Can a short sale offer all take place between the buyer/seller & lender? If so, is there a specific form that I use to make the offer to the lender? I’ve seen info about a HUD-1 settlement statement as well as submitting a form PAA to be included as an Addendum to the RESIDENTIAL PURCHASE AGREEMENT.

  • Eversince

    I submitted a shortsale offer last Friday and found out on Monday that the property has moved into foreclosure with auction date set in 3 weeks. How does that effect my offer? Would it even be considered?

  • Kelin

    We are about to place an offer on a short sale, and we have one “red flag”.  The junior lien holder is requiring that they get $30,000.00.  They want $10,000.00 from the senior lien holder, $10,000.00 from the seller, and $10,000.00 from the buyer.  As the buyer, is there anyway for us to negotiate out of this situation?  It will not go towards our equity, so basically we are paying off someone’s debt.  

  • http://REItips.com/ jp moses

    In my opinion (and experience) the second lienholder is not in much of a negotiating position. They stand to gain NOTHING if the short sale doesn’t go through. And I’ve not known first mortgage holders who are taking a huge hit with a short sale to be very understanding to the second lienholders and offer them large chunks like that. I’d say they need a reality check…which might mean you tell them something like, “Ah, the deal doesn’t make sense to me that way…I guess I’ll have to pass…which means it’ll be foreclosed on by the first…which means you’ll get nothing instead…ah well…let me know if you change your mind.”

    Always be willing to walk away.

    …jp

  • http://homytivi.blogspot.com/ HomeTivi

      submitted a shortsale offer last Friday and found out on Monday that
    the property has moved into foreclosure with auction date set in 3
    weeks. How does that effect my offer? Would it even be considered?

  • Thomas Nguyen

    can the net proceeds be higher than the BPO or appraised value? I submitted a short sale to the lender in which the offer price is $155,000. The appraised value is $155,000. The lender want a net proceeds of $174,000 while the current outstanding balance on the mortgage is $250,000.

  • Jeanna29

    Foreclosure may be a better deal for you. You may be able to get a better price.

  • Jeanna29

    Does a real estate agent get paid more on short sales than on a Fannie Mae house? I’m trying to figure out why my agent keeps pointing me to a short sale that’s a lot less, but needs TONS of work in an amazing area. Rather than a Fannie Mae house that’s $70k more in the same area, but 20years newer with less work???

  • Shughes920

    We have an offer on a Short Sale about 3 weeks ago. the listing price is 350k we offered 340k and asked for 4k towards closing. The bank has not gotten a BPO yet, so it hard to determine what the value of the home is. It is in good shape needing only cosmetic and a bath tub update. We have a Conventional loan with 10% down and are taking the property “as-is” The seller has 2 loans with Wells Fargo and owes a total close to 500k do you think this is a good offer? We have been looking for a long time and dont want to lose this one. The Seller has already accepted our offer and we are under contract and in Escrow with them but now it just lies in the banks hands.

  • http://REItips.com/ jp moses

    If it’s listed at $350K, then your $340K offer sounds strong. I’m guessing the $350K list price probably came from the lender telling the seller what they might consider. So you’re in the ball park. I’d say it sounds like a strong offer to me.

    Thanks for commenting!

    ——————-

    { REItips.com }

    { REIology.com }

  • Milly716

    this article was very informative, but im a little confused. i submitted a short sale about a week ago.  the seller has accepted and it has been submitted to the lender.  House is listed at 289k and has been on the market  since july 2011. my realtor feels the he would have listed the house at about 255k.  it needs about 25k worth of floors and cosmetic work. no one lives in the property since july 2011. we offered 238k with 3k back in closing.  whats your opinion on this offer? my realtor thought it was low but worth a try.  ??

  • Traveling1276

    Awesome article so informative ! have already sent link to article to friends to help 

  • Norman Eddie

    We bid 125 on a short sale that was listed for 131,000 with the seller paying closing. The bank told them to do the deal. Our offer was accepted, but the couple who was selling the home to remind you was getting ready to be foreclosed on was going through a divorce. The husband filed bankruptcy and put the house in their, now the bankruptcy court wont release or give the proper paperwork for this house title can be cleared and it can be sold. So now the bank is forced to foreclose, but the couple would have loved to do a short sale so it wouldn’t look that bad on their credit. My question is, Will the bank still sell us the house after they foreclosed on it or relist the house since our deal fell through only because the bankruptcy court wouldn’t give them the proper paperwork, so the BANK only choice was foreclosure to have back a 100% possession of the home. Me and my wife really want this house and is hoping the bank will do the deal since they the ones in the beginning told the couples to do the deal.