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Seller reoffered a higher price on a Short Sale than he owes?

A short sale house is listed for 879K, the records show that the owners owe 726K plus about 8K in back taxes.  We offer 650K based on comps and two estimates we got for repairs.  The house is vacant and the disclosure is exempt based on the owners not living there for there years.  They counter back at 825K, our agent ask about the short sale process and we were told that they have worked with the bank.  It does not make sense to us that the counter is higher than what is own??? We believe that they are trying to get out without going to short sale because they wanted to make sure we could close fast.  Any thoughts?  We are going to walk away if the price stays over the priced owned because the homes is "as is" and has about 50K in repairs that we can see. 
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April 27 2012 - Atlanta
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The seller owes 726 plus 8k in taxes according to the post.  Counter back the previous offer and give them the reasons for the value.  Then walk away if they don't get serious about selling.  Remember in a short sale the taxes and all liens will have to be paid for clear title.  Make sure that is addressed in the offer.   
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April 27 2012
One major thing to consider is, will the houses value be high enough for the appraisal? If it wont, then this deal is not going anywhere anyway. If your clients are serious about buying, some title companies will do a preliminary title search for free. Some title companies charge a small fee.
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May 01 2012
I have found that if the buyer and get a hold of the BPO value, and the buyer is willing to offer a contract price that will net the lien holder 85% of the BPO, then a quick acceptance is at hand.

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April 28 2012
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Thank you all for all your replies.  No, the sellers owes 726K plus about 8K in back taxes plus real estate commissions but the comps but the house from 700 to 750K. Our agent did a title search for us.  There are no recent comps for the subdivision and it's on the lake so it really hard to say if our comps are exactly right but we feel that 750K would be a price for the house if it was in great shape.  As of right now, the basement is wet and two quotes put the work at 20 to 25K for repairs. There are other issues throughout the house that put us about 50K in work all together that is seen to the eye.  Also the boat dock was sold.  Our agent tried to get more information out of the sellers agent but the seller's agent gave " there is more to the price then just the two mortgages."  When pushed for more information the seller's agent said she would have to call the clients (clients were real estate agents) and get back to us.  Two days and no answer.   
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April 28 2012
If you want to be precise on what is owed ask your title company to do a tititle search for you, there is a cost attached but it will give you a clearer picture. Having said that, I would not worry so much about what is owed, but what is the property worth. Offer that amount and be ready to walk away if necessary. The seller may want a quick closing to beat foreclosure, when there is an offer on a short sale the foreclosure can be postponed. Good luck!
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April 27 2012
You should not be worrying about what they owe to the bank and which bank and how many banks. That information is good for estimating the complications involved in the process and thus how long it may take. Just see what it is worth for you and, if you can afford it, offer that amount. You should get your primary recommendations from your agent. Do not play to the number tunes of seller.
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April 27 2012
Profile picture for B Mike West
What does your Realtor say? Why was this a short sale if they are asking  $ 879 and they only owe $ 650?  Something is missing from this equation.  Are there other liens on the property becide the first mortgage and the past due taxes?  Have you done a preliminary title search?  Are you sure that there is not a second loan on the property?  If they won't give you any information that helps you understand their situation, counter them back again at $650 and see what happens. 
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April 27 2012
 
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