Thread: Buying a short sale

It really comes down to the comps in the area as to how low you can go. The bank is going to do a brokers price opinion which is like an appraisal and is going to use those comps. If the comp properties are at 175k then that is where you want to be and even then the bank can still come back with whatever price they want. Remember most of the time it is the agent that is picking the listing price based on comps in the area not the bank that has to sign off on the offer. You could wait 3 months to hear back from the bank and they could say they want 190k. Now all that being said I know that short sales in the Twin Cities where I live are going for 16% less than the original list price. If that is the same as where you live a 170k offer would have been inline. I would have the agent show you the comparable properties in the area to see if your offer was fair. I am guessing that the reason your agent said 175K is because they truly believed that 175k was the lowest the bank would go.

What did the home comp for? Also were there other offers on the home? Are your requirments pretty strict?

Originally Posted by duckwall

It really comes down to the comps in the area as to how low you can go. The bank is going to do a brokers price opinion which is like an appraisal and is going to use those comps. If the comp properties are at 175k then that is where you want to be and even then the bank can still come back with whatever price they want. Remember most of the time it is the agent that is picking the listing price based on comps in the area not the bank that has to sign off on the offer. You could wait 3 months to hear back from the bank and they could say they want 190k. Now all that being said I know that short sales in the Twin Cities where I live are going for 16% less than the original list price. If that is the same as where you live a 170k offer would have been inline. I would have the agent show you the comparable properties in the area to see if your offer was fair. I am guessing that the reason your agent said 175K is because they truly believed that 175k was the lowest the bank would go.

this is false^^^, before any bank accepts a "short sale" they WILL do a full blown independant appriasial of the property (not a BPO), a BPO is done in preperation of a bank who is "thinking of forclosing". If that apprisal is off from the purchase price more then 10% your screwed! (hahaha, i love forums because im able to be so point blank with people instead of having to always use such care in handling customers). Short Sales are just a huge pain in the *** from every angle and i would always advise folks to persue them as a last resort (if you simply have no options or other houses that fit you, or if this "one" is the be all, end all in your life).

I went through two short sale that eventually fell apart at the end.

My lawyer's advice to me is if they are priced at market price then don't go for short sale or REO because the agony, the tedious process and the one sided contract is not worth the hassle, only suffer those if it's a good to great deal.

In a short sale, if you are the first ever buyer to submit an offer, in many cases you are the guinea pig to "test" the bank's price range. After a few buyers been through the process then you have a "bank approved price" to work with.

Chances are good that your instincts are telling you the truth. Good luck with the short sale - hope you get the property you are wanting.