Short Sale Offer Question

**carrieob** · 07-14-2011, 08:28 PM

Hi! I am new here. Thank you in advance for any help or insight you might be able to offer me.

My husband and I own our home in Texas, in a suburb of Austin. Our home value is around 290k and we have a mortgage of 180k.

A home in our neighborhood has come on the market as a short sale and we are considering purchasing it as it is quite a bit larger than our current home (over 1000 more sq ft) and we just had our 4th and final baby. It is a property that has been sitting vacant for 3 years. It is incomplete, about 80% of construction is done, but the property has been vandalized while sitting vacant.

We had a contractor give an estimate that it would take 105k to finish all construction, repair all damage, and basically make the house ready to move into.

The asking price is 299k. Once complete, it's value would be about 380k. So given the fact that it needs over 100k of work to complete, what do you think a reasonable offer is?

Thanks again for your thoughts.
Carrie

**portland real estate** · 07-14-2011, 11:26 PM

Well that depends on how much risk you want to take. There is a lot of unknowns whenever you enter a construction project, and so I would suggest being quite conservative with the cost estimates to finish the house. Thus, if they say 105k, assume 150k or 175k and then calculate what you would pay. If you come in on-budget then you will do well, but in my experience most custom home type construction projects go over budget.