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I got word from our attorney this morning that the Bank is countering $21,000 OVER list price. The house has been on the market since last summer. It was originally listed for $345,000, then dropped to $325,000, then in January it was reduced to $315,000. We offered $290,000. The counter from the bank is in line with current neighborhood list prices, but there are no comps more recent than November - NOTHING is selling. First quarter last year, there were 85 homes sold in the town...this year there were 8, and they were ALL townhouses. In addition, home sold prices in our county dropped 8% last year, and continue to drop at a rate of 1% a month. We are thinking of countering the bank at $294,000 - does this seem reasonable?
When you get down to having a representative of the bank actually responding to offers and making counteroffers I think you are over most of the hurdles. It is probably a decent strategy to offer smallish increases to your offer and then hoping the owner (bank) comes down in similar increments until you meet. I really doubt the bank has much "emotion" in it, but you also have to realize that somewhere there likely is a person and at some point they could get fed up...
I am also pretty sure that the reason the counter is over list is that the owner (bank) is worried about hurting values for other properties it may now own nearby AS WELL AS knocking the legs out of other borrowers that may be in the same area -- I have seen position papers / presentations that advocate lenders actively pushing back on foreclosure / short sale buyers to create their own floor...
The determination of value is the "meeting of the minds" between buyer & seller and you ought to explore getting other concessions beyond selling price from the bank (such as reduced rates, closing costs, terms) that a lender may be uniquely able to offer AND STILL reflect a "non-collapsing" sales price...
If they want to play games with you then ask them to pay closing costs. A short sale is "as is" obviously and that leaves all of the risks with you and nothing on them. Other homes that are comparable have sellers that may make concessions and have a lot less headaches. If the bank is worried about their interests in the area than it will be a win win situation if the sale price is higher but they pick up some added costs.
That happened to me too! The bank really wanted 40K over list price (so, like 20%). It was priced in line with others, but had been for sale over a year, so I thought it might be a good time to go a little low. I soon discovered why it wasn't moving--I think they came down 1500 in about 3 rounds of negotiating. I am guessing that the agent kept lowering the price to get people to come look at it, rather than because the bank was ready to accept the list price.
As far as what it's worth, I'd look at tax assessment, sold comps, etc. rather than worry too much about the list price, in deciding what it is worth to you.
While I agree with the previous poster that the bank isn't using emotion to determine value, I do think that they fall prey to the same individual calculus of looking at what they need to get from a house (as in, what is owed) rather than what it is worth. It is a little easier for corporate entities to lose money than individuals, but they still don't like it.
We can't use the strategy of getting a mortgage with that bank - it's AHMSI, and they aren't lending anymore. The sellers filed for a deed in lieu of foreclosure, and the bank accepted and now owns the property as of a week ago. They are continuing to proceed as if this were a short sale, for some unknown reason.
If I were you I wouldn't budge. I'd give them maybe an extra $1,000 and that's all. I'm also afraid of this happening on the short sale I offered on. The price is a realistic 2003/2004 one so I'm definitely not going up any higher should they choose to play games. Foreclosure moratoriums have ended, unemployment is still setting records, price declines are steady, rates aren't going anywhere, the economy continues to slip, bank executives are jumping ship or possibly killing themselves, and there's trillions more in wealth to be lost. There's no need to rush into something. As the person with money, you're in the driver's seat. Don't let them take that away from you. If they were deceptive about their price then there's no telling what else is going to pop up.
If they want to play games with you then ask them to pay closing costs. A short sale is "as is" obviously and that leaves all of the risks with you and nothing on them. Other homes that are comparable have sellers that may make concessions and have a lot less headaches. If the bank is worried about their interests in the area than it will be a win win situation if the sale price is higher but they pick up some added costs.
This may be the case. So the bank wants the sales figure to be higher so it reflects a higher "value." So if you counter, you may ask for closing costs and points, etc... So in effect you may keep the price you pay down and get the other fees paid for, while the bank sells for higher "number."
Absolutely. The bank made the bad decision to loan to that slacker in the first place, they should be thanking you and throwing in a bottle of wine.
Good one!
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Good one!
