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We are interested a short sale home that is asking $900,000, how low can I go?

While this house is in prime location and huge (11,000 sq ft) it requires a lot of work- new roof and pool and sauna needs to be repaired. I'm not sure how to offer on this property because there are no comparables. 
  • March 12 2012 - Salt Lake City
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Answers (5)

You should talk with your lender to see what they will accept. I would go to them first.
  • March 13 2012
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As your broker i would take a look at the title history of the property to see how much the Sr. Lienholder is invested into the property. This information is important because the lienholder will have to approve your offer either way. I would then look for comps (active,pending,and sold) to get an idea of what the current market is for your type of home. If your having problems findin comps, you should consider working with a real estate professional to assist you in the valuation process. We have comparable software that includes AVM valuation methods to help us derive an estimated value. Next would be to get a repairs estimate and consider that in your offer price. With these ingredients you should be able to come up with a current market value and formulate a competitive offer. I would advise to offer your highest and best offer from the start so that you can keep the negotiations minimal with the bank. When dealing with shortsales, i advise that you keep your consession requests to a minimum so that the deal isn't complex for the lender. Give me a call if you have anymore questions.

Jamaal Robinson
Broker
Team Robinson Real Estate
Office:562-513-7818
Direct-562-502-7579

  • March 13 2012
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Profile picture for Bert Pope
The lenders in a short sale need to verify that they took fair market value +/-, when they are audited by the feds. When your offer is made the bank will have a new BPO done to verify value. The fact that there are no comps in the area may work on your behalf. 
I have not had good sucess with banks understanding the valuation of work needing to be done to a property and discounting it like anyone else.
I suggest getting the costs associated with bringing the property up to current maket standards and share this information with your offer.
Also make sure that the listing realtor shares the information with the person doing the BPO too.
Price is determined by what someone is willing to pay.
  • March 13 2012
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Hello-- Before writing an offer I would suggest to do a repair estimate as detailed as possible so you have a good idea of the cost to repair. This way you know what your max is when it comes to negotiating the offer. Always start low, but be reasonable so that your offer is considered. Coming in to the negotiation know your costs to repair and also what repairs are essential and which ones are not. Be pared to compromise.If you are not able to find comps in the immediate area you can always look for other styles like 2 story, rambler, etc, go further out or smaller properties in the same area.

Its always best to have a 3rd party negotiate on your behalf. Im a local agent in SLC and would be glad to look up some comps for you and negotiate on your behalf if you are not currently working with a realtor. Feel free to contact me if you need any assistance.
  • March 13 2012
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Call the listing agent and see if they any knowledge from the lien holder of what they may take.  Depending on the bank and the type of loan the agent, a BPO may have already been done and a estimated value of what they will approve will be knowledge. 
  • March 12 2012
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