short sales

[Rachael84]

I'm pretty sure the owners first have to accept your bid. Once they do, you move it onto the bank(s). Yes, if you're in contract, no one else can outbid you. You aren't bidding too far below the listing price, so I think you should be ok.

Where is this house? what condition is it in? That's a very good price for Long Island

[Chrisk327]

You have to have a contract signed by both parties for it to be binding.

I have spoken to a few people regarding short sales...

The timeframe is really the deterent and a short sales isn't always a good deal.

Even though the owner list the house, accepts the offer and hires the RE agent. They really don't have any power in this, the bank makes the decision. It is long, and the banks don't always behave rationally, sometimes they will just let it forclose.

[Elke Mariotti]

Originally Posted by Chrisk327

You have to have a contract signed by both parties for it to be binding.


The timeframe is really the deterent and a short sales isn't always a good deal.

Even though the owner list the house, accepts the offer and hires the RE agent. They really don't have any power in this, the bank makes the decision. It is long, and the banks don't always behave rationally, sometimes they will just let it forclose.

All true!

[TMing]

Originally Posted by nellid

I found this post great! We are going to probably put an offer on this house thats in a short sale. The listing price is 199,900. We are going to offer them 180,000. Do you think thats a reasonable offer and if they don't accept it should we go higher? Also, you pointed out if we have a contract no one else can put an offer on the house? How long is an offer good for? Thanks in advance for all the good advice.

The seller might have priced this house low to attract more buyers. I offered $270,000 on a short sale house listed for $299,000 and was outbid by 2 other offers of $320,000 with 20% down and $310,000 cash.

[jpg71]

How is the house condition of a typical short sale? Do the current home owners keep the place well-maintained or is there no motivation left for them that they let the house go into disarray? I've read stories from other states where the home owners strip out all the fixtures, appliances, and anything else of value. Is this something we're seeing on Long Island as well?

Also, there's a house on my street in short sale that appears to be priced below market (maybe to entice a bidding war as TMing described?) - if said property sells for as low as it does, will that negatively affect the property values of the rest of the neighborhood or are distressed sales not taken at face value for purposes of comparative analysis?

[Rachael84]

I can answer your first question...

It all depends on the house. My fiance and I mostly looked at short sales. I would say most were in so-so condition, but there were a couple in fairly nice condition. The one we're buying (in contract with) is listed in mint condition and is in very very good condition. Some homeowners actually still care about their houses despite the financial struggles, which is nice to know. I would suggest looking into houses that are excellent condition and up. Those below that condition probably need a decent amount of work.

We saw 2 houses that weren't in short sale, and were actually in worse condition than 2 short sales we saw. It all depends. Sometimes sellers are selling for non-financial reasons, but haven't updated anything in the house since the 1970s. So it goes both ways.

[Elke Mariotti]

Originally Posted by jpg71

Also, there's a house on my street in short sale that appears to be priced below market (maybe to entice a bidding war as TMing described?) - if said property sells for as low as it does, will that negatively affect the property values of the rest of the neighborhood or are distressed sales not taken at face value for purposes of comparative analysis?

Yes, foreclosures and shorts sales (closed transactions) in the neighborhood do have an impact on appraisals.

[jpg71]

Ouch. Perhaps I should re-fi now while I can still get good comps.

[Elke Mariotti]

Originally Posted by jpg71

Ouch. Perhaps I should re-fi now while I can still get good comps.

If a refi is your plan, IMHO I would do it now, rather than later...
Besides, with a (somewhat) still declining market, you might also get a better appraisal overall now vs. later...