This questions was just asked on Trulia,
“I am interested in a short sale property which has been on the market for 2 years. How low is to low of an offer?”
I thought it was a great question, as many home buyers think that a short sale means they can steal the property. In most cases, that is not true. Does it happen? Yes, but very infrequently. Unfortunately, many home buyers are disappointed and miss out on great homes because they do not understand how banks think about short sales.
My response was,
There are many reasons the property could have been on the market for that long. It could have started high as a straight up listing and then somewhere along the way became a short sale or maybe it has been tied up with previous offers…. who knows!! In general, it is not relevant to what the property is worth and what the bank will accept for an offer.
As a Massachusetts Short Sale Realtor who has closed on numerous short sales I have listed and negotiated, I can tell you the banks have a formula on their short sales and what they are willing to accept for a purchase price. It does vary from bank to bank so it is hard to predict what a bank will accept. I can tell you, that most banks will sell for less than fair market value. How much is dependent on the price range the property is in, who the banks is and what other items need to be paid for that is not considered typical in a short sale.
Most banks will give up 15-20% off fair market value. Sounds great!!….. but wait!! Out of the 20% you have to add real estate commissions, attorney fees, closing costs, maybe money to junior liens, maybe municipal liens…. and so on. Typically it can translate into a 3-10% discount for the short sale buyer.
If you are working with an agent that list short sales, they will be able to guide you through the process. The first piece is to determine fair market value of the property than try to back in to a discounted offer. If you are truly interested buying a short sale property give it your best shot, but remember a short sale is not a license to steal, submit an offer based on knowledge, not windage and elevation.
See all Massachusetts Pre Foreclosure and Short Sale homes for Sale.
(all data current as of 3/8/2014)
$105,000 : 88 Congress St, Unit 3, Salem2 beds, 1 full bathListed with Keller Williams Realty
$94,900 : 163 Bishop Drive, Unit 163, Framingham2 beds, 1 full bathListed with Century 21 Commonwealth
$94,900 : 60 Michigan Ave, Lynn3 beds, 1 full bathListed with Tache Real Estate, Inc.
$279,900 : 370 S Main St, Andover3 beds, 1 full, 1 part bathsListed with Keller Williams Realty
$109,000 : 38 Brook Street, Marlborough2 beds, 1 full bathListed with ERA Key Realty Services - Distinctive Group
The property listing data and information set forth herein were provided to MLS Property Information Network, Inc. from third party sources, including sellers, lessors and public records, and were compiled by MLS Property Information Network, Inc. The property listing data and information are for the personal, non commercial use of consumers having a good faith interest in purchasing or leasing listed properties of the type displayed to them and may not be used for any purpose other than to identify prospective properties which such consumers may have a good faith interest in purchasing or leasing. MLS Property Information Network, Inc. and its subscribers disclaim any and all representations and warranties as to the accuracy of the property listing data and information set forth herein.
If you are a Massachusetts homeowner that has missed mortgage payments, or facing foreclosure or a home buyer interested in buying a foreclosure or short sale call Kevin at 978-360-0422. I will explain your possible options to foreclosure. Every situation is different and you have about five options to consider. If a short sale is your best option my short sale team will work to complete a successful short sale on your home. Combined we have successfully closed 100′s of Massachusetts Short Sales. My closing ratio is almost 10
Other Short Sale Information:
- Free eBook- Should I Short Sale My Home
- The Strategic Short Sale
- Chasing the Loan Modification
- What is a Short Sale?
- The Short Sale and the Investor Offer
- Massachusetts Short Sale vs Foreclosure
Short Sale Realtor Services in northeast Massachusetts, the Merrimack Valley and surrounding area including the towns of Andover, Billerica, Boxford, Chelmsford, Dracut, Georgetown, Groveland, Haverhill, Lawrence, Lowell, Merrimac, North Andover, Newbury, Newburyport, North Reading, Rowley, Tewksbury, Tyngsboro, Westford, Wilmington, West Newbury.