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How short are banks getting on short sales?

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How short are banks getting on short sales?

Old 03-17-2009, 02:15 PM
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Default How short are banks getting on short sales?

I am looking at a few different homes to buy, 1 of which I am told is a short sale. Doing some reaserch, one of them was bought by the current owner in 1998 for $138k, and has been refinanced several times, the latest being for $214,600 on 11/6/06 on a ARM. The house is currently listed on the market at $165k, which doing some basic figuring is at least 30k below the loan value at minimum, assuming that the originating bank still holds it, which was Wells Fargo of SC.

That said, where would your starting offer be?
Old 03-17-2009, 02:39 PM
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I think that the biggest problem with short sales it's the long waiting period the bank takes to respond to your offer... or at least thats what I'm being told.
I'm also in the process of buying a house and what I've seen is some short sales with approved price, and some without.
If they claim to have "3rd party approved price" means that most likely the asking price it's what the bank is willing to take and nothing less.
If the price had not being set, you make your offer and have to sit down and wait until the bank decides to answer your offer. I've been told that it could take months...

I'm not expert but I'm sharing my little experience. hope it helps....
Old 03-17-2009, 03:04 PM
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Offer $138,000 and put in a response time deadline! That way they know you're serious and would probably counter! Good luck!
Old 03-17-2009, 03:12 PM
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What does it appraise for today?
Old 03-17-2009, 03:17 PM
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Originally Posted by beenie View Post
What does it appraise for today?
having just purchased a short sale home Beenie hit the nail on the head.

By the way, logic will not work with the bank and be prepared to wait or move fast, or both.... and make sure your ducks are in a row, I am by no means trying to scare you away, as you can get a great deal but buying a short sale is a bit different. If you have any specific questions PM me I am happy to share what I have learned.
Old 03-17-2009, 04:18 PM
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Originally Posted by autobaun70 View Post

That said, where would your starting offer be?
In line with recent comps in the neighborhood.

Trayder pretty much nailed it with short sales. You have two choices

1) Move agonizingly slow at the banks bureaucratic pace
2) Get all your ducks in a row and drive the process yourself and move lightening fast - as in submit your offer and commit to close in 14 days
Old 03-17-2009, 04:56 PM
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Just got a couple points. This is based on GA so SC may be different.

1. There is nothing standard about Short Sales or Foreclosure sales.
2. List price does not mean anything. Just because the list price is 100 does not mean they will sell it for 100.
3. That "3rd party approved price" is a joke. I've seen things listed in our local MLS that the bank will not approve.
4. Good points about having your ducks in a row. I've seen some deal that they will not even look at your offer unless you have been approved for a loan at their bank.
Old 03-17-2009, 07:03 PM
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Originally Posted by sea nymph View Post
Offer $138,000 and put in a response time deadline! That way they know you're serious and would probably counter! Good luck!

I almost agree with you, differ in that I suggest the OP offer what the house is worth to him, not some magic number based on offering price, and sure as hell not something based on comps. In these times, comps are all but in the toilet for their value as a reference.

I'd offer what I am will ing to pay for, make it known the offer is not negotiable, and give the bank a time limit to accept. Also be prepared to walk away and do the same on another house. A crap load of houses were recently foreclosed on in Feb and March, maybe not on the market yet but banks will be happier now more than ever before to accept a lowball offer if it looks real.
Old 03-18-2009, 07:30 AM
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short sales are tough, as mentioned. Everyone of them is different, but I have not had a lot of success with them. I have even had full price offers for advertised short sale price that was not accepted by the bank. Generally you can come in lower than advertised price, and be prepared to wait a while for an answer. Leave your self an out in the contract and keep looking at new properties

you can put a tight responce time in the contract if you want, but it isn't like dealing with a private owner selling the house. If you think that will get you an answer quicker you are wrong. If anythign it will make you look deperate b.c you will keep extending your deadline b.c you haven't heard anything back. I would put a reasonable time deadline on hearing back from the offer. Just b.c the ownner signs the contract and agrees to your offer doesn't mean the bank will sell it. been there plenty of times

with that being said, banks are not wanting to be in the real estate business, although they now are. They are willign to deal in order to not go through the forclosure process on a house. You can get some great deals right now. It just might take several tries on different proerties to come up with the right one. Good Luck!!
Old 03-18-2009, 09:37 AM
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Real numbers from a house in the neighborhood of one of my rental units:Sold new in '98 for $339KForeclosed upon in '08 with a balance of $535K (re-fi'd a few times I suppose)Asking $325K It was a cream-puff, not thrashed.Just sold for $280K
Old 03-18-2009, 10:16 AM
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Was recently looking at a for-closed home, sold brand new in 04 for 545K, balance in 08 750K, the bank was advertising it for 595K and then went down to 485K. sold 1 day after the reduction for 475K.

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