Short sale question

[scooterbug44]

A couple properties I am looking at are short sales subject to bank approval.

Is the listing price pretty much the price that will be accepted?

No lowballs etc.

 

[Joe Mammy]

The bank probably has a BPO (broker price opinion) so that they know market value. Banks are not going to sell for much less (if any) than market value.

Most short sales are priced at market value. Lowballing will just put you on the bottom of a stack. If the list price is above market value then by all means lowball away.

 

[Smiling JOe]

Banks aren't communicating their acceptable price to the sellers. The sellers are having to find a price which will bring in an offer, then that offer is delivered to the lender to see if they will accept it. So, the list price isn't necessarily one which the lender will accept.

 

[steyou]

It seems to me that, potentially, if a bank will not accept the listed price wouldn't/couldn't the reputation of the Realtor(s) be in jeopardy....in the eyes of some Buyers.

 

[Bobby J]

It seems to me that, potentially, if a bank will not accept the listed price wouldn't/couldn't the reputation of the Realtor(s) be in jeopardy....in the eyes of some Buyers.

Its all about disclosure. Your buyer has to know and sign off on the fact that it is a "gamble" with the bank. The good part is they come back with a number and we can negotiate with them from there. When we turn in a package it has everything. The first thing a buyer has to understand is it will take time. It can take 3 weeks for them to tell you they have everything! I took a class and the instructor said each negotiator with Country Wide is getting 1000 plus new files a month to work on. Here is a taste of what your package should look like.

>listing agreement
>HUDS
>offer/contract (not sure what to call it)
>2 year seller tax returns
>Builder repair bid
>Seller letter
>short sale disclosures
>seller banking summary
>Summary

Lots of work to be done on a "maybe". The good part is if your package is complete and together the negotiator seems to take preference to you.

 

[scooterbug44]

>listing agreement
>HUDS
>offer/contract (not sure what to call it)
>2 year seller tax returns
>Builder repair bid
>Seller letter
>short sale disclosures
>seller banking summary
>Summary

The only thing the buyer would need would be the offer and approval right? The rest is the seller's responsibility.

 

[Bobby J]

The only thing the buyer would need would be the offer and approval right? The rest is the seller's responsibility.

And patience.... Another thing is to save the builder repairs until the bank counters. They do not want to hold these homes and if you can use the repairs for your negotiation it will help. As a buyer I would be ready to spend money on an inspection so you can get a builder quote.

 

[Diane4145]

Scooterbug44, in my opinion, this is the way to buy! I worked for Homevestors, "WE BUY UGLY HOUSES" and dealt with Mortgage Company Mitigators. They DO NOT want these properties and are usually, very anxious to "deal"! You can always go up, but, never down!;-) Go, for it! After all, nothing ventured, nothing gained, right?

A couple properties I am looking at are short sales subject to bank approval.

Is the listing price pretty much the price that will be accepted?

No lowballs etc.

 

[SHELLY]

Scoot,

Ben Bernanke addressed the Independent Community Bankers of America in Orlando this week. In his speech he stated:

"A recent estimate based on subprime mortgages foreclosed in the fourth quarter of 2007 indicated that total losses exceeded 50 percent of the principal balance, with legal, sales, and maintenance expenses alone amounting to more than 10 percent of principal. With the time period between the last mortgage payment and REO liquidation lengthening in recent months, this loss rate will likely grow even larger. Moreover, as the time to liquidation increases, the uncertainty about the losses increases as well. The low prices offered for subprime-related securities in secondary markets support the impression that the potential for recovery through foreclosure is limited."

"In 2008, about 1-1/2 million loans, representing more than 40 percent of the outstanding stock of subprime ARMs, are scheduled to reset. We estimate that the interest rate on a typical subprime ARM scheduled to reset in the current quarter will increase from just above 8 percent to about 9-1/4 percent, raising the monthly payment by more than 10 percent, to $1,500 on average."

IMO, lowball away...30-40% off--they're still ahead of the game. If a Realtor chokes, move on to the next.

Time and inventory is on your side...if you're willing to put your head (and finances) before your heart. If you've got a solid pre-approved loan in your hip pocket then you hold all the marbles.

It's a buyer's market--remember: It's not the best time to buy unless the buyer says so.


http://www.federalreserve.gov/newsevents/speech/bernanke20080304a.htm.


.

 

[scooterbug44]

Thanks!

I'd be buying vacant land, not a house, so that makes it a little less complicated w/ repairs etc.