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Answers (25)
- Bob Phillips, "BobPhillipsRE"
- Contributions:772
I'm pretty sure that Kyle has concluded his situation by now, but it is still an interesting dilemma. A lot of buyers go directly to a listing agent of a short sale, or an REO, thinking that might put them in a favorable position.
Unfortunately, if that agent isn't honorable, that conclusion may be the truth. It stands to reason that if a L/A has multiple offers, only HE really knows what they all are, and only HE can manipulate his own offer to beat all the others - so, it does make sense, and it happens more than occasionally, I'm sure.
The agent may not make a double commission, although some do, but even a 4% commission is better than 2.5%.
The final point, though, it that ANY agent should be showing you REAL comps. ( They can easily be double-checked on sites like Zillow.) If those recent comps support the price, then that is what you should offer. If it's within a thousand or two, go up 2 or 3, to ensure getting the deal, if that house is important to you.
If recent comps do NOT support somewhere near the price the agent wants you to offer, tell him to buy it himself, and walk away.
Good luck to anyone in such a situation.
Unfortunately, if that agent isn't honorable, that conclusion may be the truth. It stands to reason that if a L/A has multiple offers, only HE really knows what they all are, and only HE can manipulate his own offer to beat all the others - so, it does make sense, and it happens more than occasionally, I'm sure.
The agent may not make a double commission, although some do, but even a 4% commission is better than 2.5%.
The final point, though, it that ANY agent should be showing you REAL comps. ( They can easily be double-checked on sites like Zillow.) If those recent comps support the price, then that is what you should offer. If it's within a thousand or two, go up 2 or 3, to ensure getting the deal, if that house is important to you.
If recent comps do NOT support somewhere near the price the agent wants you to offer, tell him to buy it himself, and walk away.
Good luck to anyone in such a situation.
- sunnyview
- Contributions:25139
"You have to let your agent guide you through the process."
Not so much. If you are asking this question on Zillow, then your agent may not doing the best job explaining why they think you should increase your bid in the first place. In that case, I would say no.
Instead, ask you agent for a current CMA before you make any offer including current comparable listings, recent comparable sales, the number of days on market for listings in that local area and the % of listing price realized upon sale.
A good agent will take the time to explain, provide solid information and not have you bid higher based on nothing but their personal opinion.
Not so much. If you are asking this question on Zillow, then your agent may not doing the best job explaining why they think you should increase your bid in the first place. In that case, I would say no.
Instead, ask you agent for a current CMA before you make any offer including current comparable listings, recent comparable sales, the number of days on market for listings in that local area and the % of listing price realized upon sale.
A good agent will take the time to explain, provide solid information and not have you bid higher based on nothing but their personal opinion.
- Dean Lob, "Pacific Platinum"
- Contributions:36
You have to let your agent guide you through the process. If you are uncomfortable with the increase - hold your ground.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
Monique,
Are you certain everyone said the same thing?
Are you certain everyone said the same thing?
- MoniqueU
- Contributions:114
19 answers and everyone said the same thing.
except not many agents really listened to the question. he has already seen the proprty with an agent so he can't changed agents. all agents know this.
If the agent told you to offer $ 25,000 over the selling price. wouldn't this be price fixing? all the agents on here should know the answer. call her broker and ask the broker if this is normally done. the broker may assign you a different agent. may even fire this agent. and if you are paying too much. you may be able to go after the agents errors and ommissions insurance after the proprty sells.
except not many agents really listened to the question. he has already seen the proprty with an agent so he can't changed agents. all agents know this.
If the agent told you to offer $ 25,000 over the selling price. wouldn't this be price fixing? all the agents on here should know the answer. call her broker and ask the broker if this is normally done. the broker may assign you a different agent. may even fire this agent. and if you are paying too much. you may be able to go after the agents errors and ommissions insurance after the proprty sells.
- Steve Mancilla, "Cal Steve"
- Contributions:58
Kyle,
You say you are dealing with a Listing Agent, where is YOUR agent, the Selling Agent? If you are confused, that tells me neither the Listing Agent, nor (if you have one) your selling agent is doing a proper job for you. Fire them both and get a good team that will work for YOU!
There is plenty of inventory for you to choose from.
On a brighter note, congratulations on making the decision to buy now!
Feel free to contact me if you need any questions answered.
Good Luck!
Steve
You say you are dealing with a Listing Agent, where is YOUR agent, the Selling Agent? If you are confused, that tells me neither the Listing Agent, nor (if you have one) your selling agent is doing a proper job for you. Fire them both and get a good team that will work for YOU!
There is plenty of inventory for you to choose from.
On a brighter note, congratulations on making the decision to buy now!
Feel free to contact me if you need any questions answered.
Good Luck!
Steve
- Marco LaPadura David Lau, "Team MD"
- Contributions:263
25k over the short sale value may be the the sale value what you need is a comprehensive Market analysis comparing similar properties sold with in the last 3- 6maonths at the most. Then by seeing what the true sale value is you will know if your offer of 25k more is reasonable or not. The lender will evaluate each offer based on Price offered and how ready and able the buyer is to purchase. My question is 25k based on what facts or current data. If she can support her statement with facts then listen to her. if not put your best foot forward and see what happens
I hope it works out for you.
I hope it works out for you.
- Karrina Taylor Brown, "Karrina Taylor Brown"
- Contributions:22
Yes, work with your buyers agent to evaluate the best offer for you to make. Their are lots of details to consider when making your offer.
- Caroline Choi, "Caroline Choi"
- Contributions:98
You just have to do what feels right. Short sales don't necessarily offer the best deal. The banks really do their due diligence to make sure the property is being sold for market value, so even if you offer more than the asking price, it doesn't really mean anything. Here's the mindblower: the listing price isn't real. I'll say it again: the listing price isn't real.
Sure, sometimes the agent listing the short sale has accurate comps and comes close to what the property will actually sell for. Many times, the comps are off, old, or the price isn't based on comps at all - simply just a teaser price. But the bank doesn't set the listing price -- the listing agent does. So don't think you just offer that price and you're good to go. The bank will do their own appraisals anyway and will counter offer you if your offer doesn't meet their requirements.
Get yourself a buyer's agent and if you still are interested in the property, pursue it. If not, you'll find another one you like. Promise. Good luck!
Sure, sometimes the agent listing the short sale has accurate comps and comes close to what the property will actually sell for. Many times, the comps are off, old, or the price isn't based on comps at all - simply just a teaser price. But the bank doesn't set the listing price -- the listing agent does. So don't think you just offer that price and you're good to go. The bank will do their own appraisals anyway and will counter offer you if your offer doesn't meet their requirements.
Get yourself a buyer's agent and if you still are interested in the property, pursue it. If not, you'll find another one you like. Promise. Good luck!
you DEFINITELY need your own agent. While dual agency is allowed, a dual agent cannot advise you at all on price, as that creates an immediate conflict of interest.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
First of all, regardless what you offer it may take months before you know if your offer was accepted or rejected. Do you really want to put yourself through that?
What will interest rates be then? Will loan guidelines change to were you may not qualify or have higher fees? How many nicer properties at lower listing prices may be available then. In 4 months, would it still be a great "deal?"
Happy funding, Rudi
What will interest rates be then? Will loan guidelines change to were you may not qualify or have higher fees? How many nicer properties at lower listing prices may be available then. In 4 months, would it still be a great "deal?"
Happy funding, Rudi
- Michael Mullin, "WA and CA FHA Expert"
- Contributions:369
Kyle, you need your own agent. Work with someone that knows both the neighborhood AND has experience with short sales. CA allows dual agency but who do you think the listing agent is really looking out for?
Hiring the right agent means you'll have the best shot at not overpaying for a property and they will be looking out for your interests when negotiating the contract - there are tons of contract details beyond the sales price.
Hiring the right agent means you'll have the best shot at not overpaying for a property and they will be looking out for your interests when negotiating the contract - there are tons of contract details beyond the sales price.
- Ed Brophy, "Ed Brophy"
- Contributions:455
Brian: "A listing agent cannot be your agent and does not represent you."
Brian here in CA we have dual agency, so the listing agent can represent a Buyer and Seller. As long as the dual agency is disclosed to both there's no harm.
To Kyle: You have to ask yourself are you willing to pay $25k more for the property?
Brian here in CA we have dual agency, so the listing agent can represent a Buyer and Seller. As long as the dual agency is disclosed to both there's no harm.
To Kyle: You have to ask yourself are you willing to pay $25k more for the property?
- Tere Rice, "Tere Rice"
- Contributions:307
This offer may get accepted by the list agent then presented to the bank and then accepted and escrow opens if your lenders appraisal is $25000 less than offered you can then renegotiate the price, the Short Sale Lender or Seller knows it can not get more than what another lender will lend on it! If you have removed your appraisal contingency, then you would have to pay the difference in cash.
- Larry and Sheila, "Larry and Sheila"
- Contributions:61
Make sure you are working with a Certified Buyers Representative who works for you and not the seller! The same proceeds come out of the sale and doesn't cost you extra to have an agent working on your behalf!
- Brian Hayhow, "The Hayhow Group"
- Contributions:91
Your question states "my agent" then the story below says "a listing agent". A listing agent cannot be your agent and does not represent you. Highly recommend getting a Realtor to represent your interest in this or any house. Bank deals are great - but only if you really get a deal! Best of luck.
- Rich Lee, "Real Estate Geek"
- Contributions:99
Kyle1223,
Let's take your questions one at a time.
First, it sounds like you are working with a listing agent. Her fiduciary duties are to the seller, unless the seller and you have agreed to use her as a dual agent. With that said, it is possible that you are competing with other offers which leads us to the next question.
You might or might not get a good deal when buying a short sale. Banks don't want to lose money so they look for what they believe is a fair price. The listing agent and | or attorney needs to convince the bank that the highest offer is a fair price for the property. Is a fair price a good deal? It depends on each situation and that's for you to determine.
Finally, as I alluded to earlier, the bank can always reject your offer. They are not required to accept any offer that results in them losing money.
Cheers,
Rich
Let's take your questions one at a time.
First, it sounds like you are working with a listing agent. Her fiduciary duties are to the seller, unless the seller and you have agreed to use her as a dual agent. With that said, it is possible that you are competing with other offers which leads us to the next question.
You might or might not get a good deal when buying a short sale. Banks don't want to lose money so they look for what they believe is a fair price. The listing agent and | or attorney needs to convince the bank that the highest offer is a fair price for the property. Is a fair price a good deal? It depends on each situation and that's for you to determine.
Finally, as I alluded to earlier, the bank can always reject your offer. They are not required to accept any offer that results in them losing money.
Cheers,
Rich
- Erika Phelan- Buyers Agent, "Orlando Buyers Agent"
- Contributions:103
The listing agent is not your realtor, she works for the seller and her job is to sell the property at the HIGHEST price and most favorable terms for the seller....her job is to get you to offer more.
Find another agent and another house...there are plenty of properties and buyers agents that will represent your interests.
Erika in Orlando
Find another agent and another house...there are plenty of properties and buyers agents that will represent your interests.
Erika in Orlando
- Luanne Lind, "Agent Luanne"
- Contributions:2
My concern would be why she listed it so low. You need to have someone else do a market on the home for you to determin if you are making an offer that is a "good deal".
Don't offer more than the value of the home.
Don't offer more than the value of the home.
- Joan Braunschweiger, "Morris County NJ"
- Contributions:1543
I always cringe when I hear about a situation such as this when you are involved in a dual agency situation because you do have to KNOW that your agent adheres to the highest ethical standards and sometimes, unfortunately that can be difficult.
Regardless, it is the recent sold comparables that will tell you what you should do because you don't want to be stuck with paying over market value, especially because in so many markets, real estate may take years to rebound ( I admittedly don't know your market).
Yes, of course the bank can reject your offer.
And no, short sales are still usually priced pretty accurately in line with the current market so you don't necessarily get a good deal, especially in markets where bidding wars often ensue. It can truly lead to the "winner" being the loser because they have ended up with a house which they paid way too much for.
Regardless, it is the recent sold comparables that will tell you what you should do because you don't want to be stuck with paying over market value, especially because in so many markets, real estate may take years to rebound ( I admittedly don't know your market).
Yes, of course the bank can reject your offer.
And no, short sales are still usually priced pretty accurately in line with the current market so you don't necessarily get a good deal, especially in markets where bidding wars often ensue. It can truly lead to the "winner" being the loser because they have ended up with a house which they paid way too much for.
- Michael Gonick, "michaelgonickrealtor"
- Contributions:58
I lean on a very basic principle in matters like these.
It might sound juvenile, but it goes back to this. Do you trust your Realtor? How did you pick your Realtor? In this case, does your Realtor have specific expertise in negotiating short sales for clients?
I know it may sound strange but there is where your answer lies. There is no magic formula for obtaining a short sale (or any other property for that matter).
But it does come down to to the basic trust you have in the person you are working with.
It might sound juvenile, but it goes back to this. Do you trust your Realtor? How did you pick your Realtor? In this case, does your Realtor have specific expertise in negotiating short sales for clients?
I know it may sound strange but there is where your answer lies. There is no magic formula for obtaining a short sale (or any other property for that matter).
But it does come down to to the basic trust you have in the person you are working with.
- Steven Pacchiano, "NY Broker"
- Contributions:313
the bank can reject any offer they want. In a short sale the bank is trying to recoop as much of the old loan as they can. And provided every offer has a qualified person, the bank will take the highest offer, over the asking price included.
- johnnyloans
- Contributions:25
no
- Steven Werth, "Steven Werth"
- Contributions:1
Great question. This is a widely asked question in this industry.
Realistically, you need to run comparable's on like properties. Whenever I have a client that would like to write an offer on a short sale, we go through many variables:
How many lenders are there?
What are the comparable sales coming in at?
Do a neighborhood analysis report.
Are there back HOA dues to be paid by the new seller?
Are they asking for the buyer to pay for the negotiator on the short sale?
There is a chance the bank(s) could come back with more money required out of pocket.
If the Short Sale is listed under market value compared to other SOLD properties in the surrounding area and the $25k puts it in line with the comparable properties, well, I would suggest doing somewhere near there.
If the property truly has several offers, the COMPS will tell it all. Do your homework.
Lastly, OFFER presentation is EVERYTHING in an offer. There are many ways to make your offer stand out and shine over the faxed offers.
Realistically, you need to run comparable's on like properties. Whenever I have a client that would like to write an offer on a short sale, we go through many variables:
How many lenders are there?
What are the comparable sales coming in at?
Do a neighborhood analysis report.
Are there back HOA dues to be paid by the new seller?
Are they asking for the buyer to pay for the negotiator on the short sale?
There is a chance the bank(s) could come back with more money required out of pocket.
If the Short Sale is listed under market value compared to other SOLD properties in the surrounding area and the $25k puts it in line with the comparable properties, well, I would suggest doing somewhere near there.
If the property truly has several offers, the COMPS will tell it all. Do your homework.
Lastly, OFFER presentation is EVERYTHING in an offer. There are many ways to make your offer stand out and shine over the faxed offers.
- MoniqueU
- Contributions:114
Remember you are dealing with a seller first, then a bank second. so if the seller doesn't accept. its a dead deal.
just offer the asking price with a 2000 dollar escallation clause up to 25000 over asking price.
so if someone offered 3000 over asking price your offer would be 5000 over.
make sure you have the appraisal disclosure so if it appraises at 4000 below asking price. they will have to take the appraised value.
Did the realtor tell you the time frame for the short sale acceptance? remember, they will have your deposit for that long of a time frame. so it is hard to go onto a different proprty.
Make sure you have a fast mortgage broker. the bank will want a loan approval. then by the time the short sale is approved, the loan will have to be resubmitted for approval and ready to close in less than 30 days.
All your inspections will have to be done very quickly after the bank approves the short sale. I have seen people be advised to do all the inspections before the short sale is approved and have lost a great deal of money when the bank didn't take the short sale.
unless you are saving a whole lot of money, short sales really aren't like they use to be.
just offer the asking price with a 2000 dollar escallation clause up to 25000 over asking price.
so if someone offered 3000 over asking price your offer would be 5000 over.
make sure you have the appraisal disclosure so if it appraises at 4000 below asking price. they will have to take the appraised value.
Did the realtor tell you the time frame for the short sale acceptance? remember, they will have your deposit for that long of a time frame. so it is hard to go onto a different proprty.
Make sure you have a fast mortgage broker. the bank will want a loan approval. then by the time the short sale is approved, the loan will have to be resubmitted for approval and ready to close in less than 30 days.
All your inspections will have to be done very quickly after the bank approves the short sale. I have seen people be advised to do all the inspections before the short sale is approved and have lost a great deal of money when the bank didn't take the short sale.
unless you are saving a whole lot of money, short sales really aren't like they use to be.
should I offer $25 K over the short sale price because that's what my agent suggested.
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