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We are considering several hoem sin the area to which we will be moving. One of our favorite prospects is a short sale home. Does the bank ever negotiate lower prices than the asking price on these? There are 2 identical model homes across the street from one another and the one which is a short sale home is priced $55,000 higher than the other. And wouldn't you just know it, that is the one we prefer . The home is no bargain. Should we just stay away from it? Or make our offer (which would be about $50K less than asking) with an explanation based on the sale price of the home across the street? Identical model, year, amenties etc.... How often do the lenders evaluate the market value of the house? Or is that the realtors job...to see if it is priced appropriately for the current market?
Yes, I have lots of questions in the wee hours of the morning. Thank you for your assistance.
If it's a short sale and not an REO home, the price right now was set by the seller and his realtor. The bank has nothing to do with the pricing at this point. Once you make your offer, the bank must appove the sale at anything less than what is owed on the property. The bank will order Broker Provided opinions from 2-3 local brokers, and then make their decision from there. A good rule of thumb is that they accept offers anywhere from 20-0% off what the BPO's come back with as market value. All depends on the lender and what the BPO's come back as.
Go ahead and make whatever offer you feel works for you, but be prepared to wait a while for a reply, if there is another home that you like and is priced more to your liking, you have to realize the possibility the bank will reject a reasonable offer after 30+ days of waiting and your other dream home is now sold.
What does your buyer's agent say about the situation? He may be able to structure the situation so that you have both houses covered.
We viewed a short sale also this weekend, and liked it. They have it priced
at 419,000, we would offer 350 if we decide we like it enough, if they reject,
then bye bye. You have to be able to just walk away from a deal. Unless we
can get it cheaper than what the new homes are going for here(388,000 to
400,000)then its not worth it to us. I think we are leaning new.
We viewed a short sale also this weekend, and liked it. They have it priced
at 419,000, we would offer 350 if we decide we like it enough, if they reject,
then bye bye. You have to be able to just walk away from a deal. Unless we
can get it cheaper than what the new homes are going for here(388,000 to
400,000)then its not worth it to us. I think we are leaning new.
Very interesting....that's a 70k price swing. Even new construction isn't $350,000.00 so this makes the scenario even more interesting - Just out of curiosity, why $350,000.00?
[quote=walidm;2043384]Very interesting....that's a 70k price swing. Even new construction isn't $350,000.00 so this makes the scenario even more interesting - Just out of curiosity, why $350,000.00?[/QUOTE
Because in this particular neighborhood there are at least 10 homes for sale,
and empty or about to be. One had a forclosure notice on the front door and
was going to auction. Others were empty and we have viewed 3 of them. One of the homes we looked at there has now come down to 389,000 and
I have a feeling it will just keep dropping or foreclose. These homes were built
in 2004 when prices were sky high and Im sure people took adjustable loans,although in the case of the one we just looked at its a divorce. The
guy was moving stuff out as we viewed. sad. This isnt a large neighborhood but fairly nice and newish. Why 350,000? why not? Like I said
Im eying some brand new homes that are having price cuts too,and Im not
in a big hurry. Next time I check on that house it will probably be at 390 so
350 might not seem so bad. The slump has hit hard here in Lompoc. Bad for
sellers,but good for us upgraders
A Short sale is a sale in which the bank has agreed to allow the homeowner the opportunity to
1. establish why they can no longer pay the mortgage.
2. place the home on the open market for sale with a broker.
3. sell the home for less than what is owed in order to stave off foreclosure in light of the owners documented financial difficulties.
4. the bank is in the drivers seat and will approve all offers as well as verify the market through ind. broker opinions.
5. the owner will not walk with any monies. period.
6. the owner may have to file a 1099 for the balance.
7. it is not an easy process, please find a Realtor to help you.
8. the owners credit will take a hit, please discuss this with the bank.
Here in san jose, there are two extremes of housing market. The good area are still going up, and getting multiple offers, but some starter home area which is particularly hit hard by subprime landing, is flooded with REO and short seller. I just helped my client to put in a short sell offer on a 3 bedroom house. There are 5 exact tract house in the area, 3 are normal sellers asking for 599K~628K. One is a short sale asking for 560K, another REO for 525K. I just offered on the 560K one for 510K. The listing agent had the house listed at 630K and came down to current 560K and no activity. He basically said bring anything just not too rediculous as below 500K or anything.
Now it's just a waiting game ....
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. The home is no bargain. Should we just stay away from it? Or make our offer (which would be about $50K less than asking) with an explanation based on the sale price of the home across the street? Identical model, year, amenties etc.... How often do the lenders evaluate the market value of the house? Or is that the realtors job...to see if it is priced appropriately for the current market?
This isnt a large neighborhood but fairly nice and newish. Why 350,000? why not? Like I said
short sale in san jose
