Profile picture for Lost in Real Estate

Offer too low for a short sale?

we recently made an offer for a short sale home in our area. We don't know what the appraisal value is, but the buyer owes $450K on the home, and the home was listing for $450k with a private realtor.When we contacted the agent, we were told that it was a short sale, and the bank would be auctioning the house in the next month or two, if a short sale offer was not accepted. They had reduced the house to $350k on their website (probably in an attempt to generate offers). After speaking with the seller's agent, a property attorney and a short sale specialist, they recommended that we offer $260k for the home. My husband and I think this price might be too low, as other homes in the same area are selling for $400k+. Since getting the recommendation, we listened to the advice and put in an offer of $260k on the home, but now we are wondering if the bank will laugh at us. Is there anyway to let the bank know that we can work with them on the price point. We dont want to low ball them, but we are first time homebuyers and really do not know much about short sales... Any recommendations or advice would be much appreciated!!!!
  • July 15 2010 - US
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Answers (2)

Profile picture for wetdawgs
The bank won't approve an offer that is way way below appraised value, so yes, if other homes are selling in the area for $400K +, your $260 k will be put in the sleeper bin.

You need a good CMA for the house, and if you wish your offer accepted, make an offer close to the appraised value and/or CMA.

  • July 15 2010
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the asset manager of the mortgage company that holds the current note will have an approval sheet of what they would like the home to sell for. This is provided to the listing agent with an expiration date. if the appraisal or BPO states a market value of over your initial offer the lender will take there chances in getting a higher offer by going into foreclosure.

You can request your agent have an escalation clause that will go above the current highest bidder by a dollar amount or percentage. But the catch is what the appraisal amount will come back at if they accept your offer.

Hope this helps..
  • July 15 2010
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