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Short Sale - Analyst Approved Offer, Investor Countered, Now What?

We submitted an offer of $430k for a short sale. Finally went to an Analyst, they did a BPO, came in a $475k. We made a case for $430k, including work the house needs. Analyst gave our agent a verbal approval of $430k and said it was going to Level 2 for approval and a letter should be forthcoming in a matter of weeks.

I just found out the Investor is balking and wants $495k (original list price).

What case can we make for ourselves at this point? Agent's advice is to accept and hope for a low-ball appraisal, and then revisit price. Seems dicey.

Thoughts?
  • June 14 2012 - Sacramento
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Answers (5)

Profile picture for Jeff Grenz
Of course it's dicey to count on a low ball appraisal now that the market has heated up.  There should be legitimate reasons that the investor believes the home is worth the same price the listing agent believes its worth.  Check the comps.  While the home needs work, I often have to remind my buyers that many if not most of the comps ALSO needed similar quantities of work.   Its time to be honest with yourself.... can the seller find another buyer for this home at $495K?, at $475k?  can you find something better?  In this market, the prime stuff is getting plucked, leaving the marginal.  Forget 2011 prices.
  • June 19 2012
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Profile picture for Marie Cruz
First of all, the Analyst is an employee of the Bank and they DO NOT have aauthority to make such executive decisions without having it in writing from the Investor, which is the real owner of the loan (home).  The investor and not the bank gets to decide based on their own formula/calculation what percentage they are willing to loose on the investment.  ...The bottom line is if you are in love with the property and you see the value in the home and don't mind waiting and waiting some more to hear fromt he investor!!

Good luck!
  • June 15 2012
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I may agree with your agent IF you still want the home and STILL think it is worth it even at the higher price with the repairs. You NEVER can count on the appraisal Data changes DAILY..There is not much you can do if you want to get to the next step.You can walk away and never know if you could have renegotiated the home with a inspection info or a certified appraisal. Check into county records and permitting,many homes have outstanding permits..that can be a means of negotiations during inspection period.I had one without a permit for a screen enclosure and it actually had to COME DOWN to be compliant...than a loss of a 4000 adjustment to the home.You would still need inspections, if you have not done them already for any reason,use the inspection report,estimates etc...to make the case if there are real issues that could help lower the value.
The banks are clueless to any underlying issues that may come up on the home. Information about the home,for reputable sources can make the case for you.If it is meant to be it will work out.If not you must be ok with the out of pocket costs of the inspections,estimates,and appraisal. If they do not reduce after inspections and comprehensive list of repairs and estimates,then do NOT totally count on the appraisal being short.MANY HAVE appraised and if it does....the house is yours and not for the cheaper price. Be flexible and if it did appraise,do you still want it for that price? If the answer is NO,then rethink your next step now.

  • June 15 2012
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Profile picture for B Mike West
If your "Analyst" is independent from the loan servicer or investor their opinion is not likely to hold water with the investor.  The servicer had a BPO done before they put it on the market and they will stick to that number like glue until the home has been on the market for 90 to 100 days without getting any offers. When the time comes they are not going to drop their price to $430, or anywhere near it.  They are confident that they can get a dozen offers for more than your $430. 

I suggest that you move on and find another property.  If you continue with low ball offers you are going to end up frustrated and without a home.
The market has changed and loan servicers and investors will not waste their time with low ball offers.
  • June 14 2012
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I don't know about Sacramento, but in recovering real estate markets, these bank investors are seeing increasing prices.  If you don't accept their price, they will, in their opinion, find someone who will.  You don't have much recourse.  A verbal offer or approval is garbage.
  • June 14 2012
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