Because, if they thinkthe property is worth any where near $1.9M, they know it's a waste of 60-90 days (and 60-90 days closer to foreclosure) if they accept your offer. They would be dummies to accept your offer.
When you say hey are you talking about the bank or the seller? The bank had it appraised and it was roughly $2M. However the purpose of a short sale is because the owner owes more than what the property is worth. I don't claim to know a great deal about the sellers finances but with the loans they have on the property, it looks like they owe $1.9M.
Thanks for the reply Wayne. I'm still wrapping my head around all of this
There is not enough information to determine if the offer is really too low. One thing for certain, the seller needs to be educated as to what the true goals here are.
Dennis, when I said "they" I meant the seller and agent. Usually the bank doesn't do any appraisals (BPO's) until aftyer an offer is made. But, you said the bank had an appraisal of roughly $2M. So, why would they take $1.2M? Banks are not in the business of giving away 30-40% so that an investor can take that as profit.
The Seller is still the Owner of the Property. Take it to the extreme. Would you expect the Seller to accept an offer for a dollar, submit it to the Bank and waste the time of everyone involved?
The Seller stands to gain many things if the Short Sale is successful.
That makes sense.
Dennis - II would not want to waste my time as listing broker for the short sale seller on an offer not likely to be accepted. 100s of phone calls, faxes, make work, to already know the answer? It not only wastes the short sale listing brokers' time, it waste the buyer's agent, the buyer's and the seller's. The process could take four months. Meanwhile, most MLS's require the property to be removed from "active" status. Then the seller is losing the opportunity for a more realistic offer, as most agent won't show homes under contract.
Oh okay I didn't know that. I thought they could still accept other offers as back up offers.
Dennis, even if they do accept back up offers, they don't get submitted to the bank, and the first contract winds itself all the way out before any others are acted upon.
If the Seller occupies as Principal Residence then he will get the Personal Residence exclusion for the tax on Forgiven Debt. If the Seller is not living there then there are 2 other ways to get an exemption: 1. Insolvency or 2. BK these sound the same but are different, search the IRS.gov site for "Short Sales" and you can read up on it. Other than that it would be no other reason unless you are located in a "Recourse State" where the Seller is owed the deficiency, but then a BK would laso be an option to avoid that debt.. However, many Sellers are either un-informed, proud, stubborn, jealous (that they Buyer is getting at a low number and he is not), or all of the above.Try and persuade the Seller's Agent on this basis or get permission to "pitch" the idea directly. Good Luck!