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confused on what to offer
i am currently looking at a short-sale property with my husband.
Our realtor sent us over the comps, but they seem to be all over the place
The house is appraised at 336k. However, it is for sale for 315.
the comps in teh area are from 250-399 so they are kind of all over the place. I went through them all but it seems that nothing is quite as easy as it looks.
Our parents think we sould really lowball the offer at say...285 and just see what they say.
We saw that the loan was originally taken out in their name at 285 and then they took our a 2nd mortgage a few years later (to add on an addition) for 50k.
I'm afraid a lowball offer will risk our chances of getting this home- but it is a short sale.Is there anyway to see what is still owed to the bank?
Also, the house has been dropping in prive 10k at a time every few monhts- its been on the market for 8 months and has been at its current price for 48 days.
Any advice help or experiences is helpful!
Our realtor thinks we need to go in about 10k higher than we want to offer...
Re: confused on what to offer
You can low ball if you don't think anyone else is offering. The sellers may agree to it and then it will go to the bank. This is what really matters more than the sellers. The bank will do a BPO (I believe that is the term) to determine the value. That would be cost you will actually pay for the short sale so long is you agree to it with the bank. Please remember that short sales can take a long time. I have heard that they are moving faster these days but you could be waiting anywhere from 6 weeks to a year from what I have heard others say.
Ditto PPs. Short sales are tricky. Sometimes they list a house for less than what it's worth and try to haggle with you to pay an increased rate for it. Plus the process can be lengthy and you are not guarenteed a house. Just know what you are getting into.
And I would add that if you do make an offer, it needs to be based on what you're willing to pay for the house, what you can afford and what you think it's worth.
The sellers will accept whatever you offer. All they want to do is get out from under a house they can't afford. So offer whatever, because it doesn't really matter. What matters is what both banks (since there is a 1st AND a 2nd mortgage) will accept. This may be State-specific, so ask your REA for the best information. That said, here in MD, the process is that the deal is submitted to the first bank and the first bank goes through their entire approval process. Bank 1 can accept the deal as-is, or can demand a higher price. If they accept, your deal is then moved to the second bank, who can approve or demand more money. So just because the list price is $315k, you can't expect to actually get the house for that sum because you will be forced to play by the rules of 2 different banks and satisfy both of their interests.
FWIW, we had a SS contract. The house had been for sale for 4 months. Original list price was $485k. No offers. Dropped to $460k. No offers. Dropped to $450k. We were the first and only offer. Under contract at $435k. Bank demanded $500k. We countered at $450k and refused to go any higher because the BPO was wayyyyyy off and the house in its current condition simply was not worth $500k. The bank just stopped responding to us. The contract expired, and that was that. That SS is still on the market more than 4 months later.
thanks for the feedback
and @ love kiss thanks for the letting me know the experience you had.
I just assumed snce it was listed so low we'd be able to get it at that price.
We are putting ina 75 day clause so if we don't hear back we can get out of the contract and will continue to look at homes, we don't have to be out of our own apartment until 3-31-12 so we hjave some time....for now...
The problem i see a lot of people having is the bank is either waiting it out for more $ or is going to throw a huge number out there, even when teh home isnt worth that. As with many short sale situations, in the past 6 months the homeowners have 'let the house go".... you can see the paint peeling and the garden is all overgrown etc...so we know that with the current state the worth of hte home.
Can your agent find out if there's any offers currently being reviewed? If not, I would offer the $285K requesting closing costs too along with home warranty. They can counter-offer. If there are other offers right now and you REALLY like the house, you should offer more - the amount you're willing to pay and not feel bad about in case they deny your offer.
Make sure the short sale is already approved by their bank because if not, the bank can counter-offer you and ask for more along with making you sit and be worried and stressed for months. Short sales are not fun. I went through one and wouldn't recommend it, we ended up cancelling because it was taking too long and then bank thought our offer (which seller accepted) was not high enough. Hopefully, this is not the case with you, good luck !
My H & I just bought a short sale and surprisingly, had a good experience.
A bit of advice - never be afraid to offer what you want. Do not let the realtor pressure to offer more than your comfort level. They will say anything to get you to offer more because remember - the more you pay, the more commission they get out of the deal. We cut loose 2 realtors for pulling this kind of nonsense with us and the house we wound up purchasing, we just went straight to the listing agent and dealt with her directly. It was much MUCH easier for us this way.
That said - we made our offer on our house in middle of May and closed by end of July, so the process went fairly quickly. There were 2 mortgages on the property, but luckily for us, both mortgages were with the same bank, so we didn't have to deal with 2 separate banks fighting it out over money. The bank assigned someone to do a BPO and the BPO actually came back at 50k lower than what we offered, so in the end, we got the house for the lower price - which was huge for us. When our bank did their appraisal for the mortgage, it came back higher than the purchase price. I think in the end, the bank just wanted to unload the property already....the house had been on the market for well over a year...
So yea, don't be afraid to make a lower offer if you are seeing other homes in the area selling for lower prices. Obviously do it within reason - don't make a ridiculous offer. I think 285k is fair - the worst that can happen is they say no, or counter your offer. Try to find out which banks hold the mortgages though...if both are with the same bank, you might find the process goes a lot quicker