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 in 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.
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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
- [intlink id=”258″ type=”post”]The Strategic Short Sale[/intlink]
- [intlink id=”551″ type=”post”]Chasing the Loan Modification[/intlink]
- [intlink id=”365″ type=”post”]What is a Short Sale?[/intlink]
- [intlink id=”533″ type=”post”]The Short Sale and the Investor Offer[/intlink]
- [intlink id=”328″ type=”post”]Massachusetts Short Sale vs Foreclosure[/intlink]
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.
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