Profile picture for marthajoe

how low can i bid on a short sale home? i heard its harder than buying a bank owned....

looking at a home for sale, its a short sale.  i heard it is easier to get a bank owned home.the home i am looking at is small, however, asking price high.  i don't want to waist my time, if the bank would rather it go into forcloser.  thank you
the home is on oceana in waterford mi...
  • Question refers to 4109 Oceana Ave, Waterford, MI 48328
  • September 07 2009
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Answers (4)

What do you have to loose?  Seriously?  You're free to walk until they accept your offer, so contact an agent and submit it.  Worst case is that they say NO!

In the meantime, you can continue looking, and a good agent will happily submit the offer for you.

Be realistic, and offer 10% below asking, if you really want the home, but 20 to 30% below asking (offers) are approved every day. 


Give it a shot, 

Eric
  • September 07 2009
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Profile picture for Lorrie Bailey
Hi, you can offer any amount on a short sale just as in a bank owned property. The bank will determine how much they will take based on the comparable properties in the area. Short sales are harder because they take longer than a foreclosed property does, but they are usually in better shape. And need less dollars to make them livable again.
Please call me and we can discuss the further.
Thank you
Lorrie Bailey
248 884-6723
  • September 07 2009
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Mike Emery pretty much hit the nail on the head. If the bank is not aware of a short sale, it takes them by surprise and it can be a long and drawn out process. When that first offer is received, the owner must prove a hardship and they are unable satisfy the mortgage. Then there has to be a brokers price opinion (BPO) as to the value of the property and the bank will have the property appraised. With all the short sales & foreclosures the bank has to deal with, this can be a time consuming process.

However, if the owner has already prepared the bank for a short sale, the process can be greatly expedited. What I do on a short sale is to ask the listing agent if the bank is aware that the house has been listed for a short sale. Then, when the offer is submitted, I give the bank a week to reply, that way if they don't reply you can move on and look at other houses. Cash offers are the strongest, followed by pre-approval not pre-qualification. As far as what to offer - make it realistic. Banks want to minimize their loss, but they don't want to hold real estate either.

The house you are considering has not had a sheriff sale, so the foreclosure process has not begun yet. It has been on the market for more than five months and there doesn't appear to be any price reductions. I am a local realtor and can write and submit an offer for you.

Positive feedback is always appreciated.
  • September 07 2009
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Short sales are inherently more difficult to purchase because when you submit a purchase agreement first the homeowner must agree to the terms then the homeowners lender has to agree to the terms of the purchase agreement.

And if the homeowner hasn't notified their lender in advance of a short sale situation, then things can get even stickier.

With a foreclosed home you only need approval from the lender that owns the property. Atypically I've seen homes that were in short sale then go into foreclosure that the price drops. But there is also a danger of neglect and vandalism once a property is abandoned by the homeowner, so that could in part drive down the final sales price.

The good news about short sales is there is less competition for them because most agents and homeowners don't have the stomach or the time to wait out the 2 to 4 months for the bank to agree to a sale. Plus an average of 1 of 3 short sale homes never complete closing, due to various factors.

If you have the time (and the stomach), make an offer. Otherwise, it's best to move on.
  • September 07 2009
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