Replies to This Discussion

Permalink Reply by Meli Van Natta on May 5, 2013 at 12:50pm

Dennis, I don't know what State you're in, but here in California it's the SELLER who decides which offer to accept if any.   The Bank does NOT get to make that call!   Why should they?  It's not THEIR property!   They only get to decide whether or not to approve a transaction that the seller has entered into.  IMHO they stick their noses in too far anyway by deciding whether or not the transaction can include certain negotiable costs or costs typically paid for by the seller.

The Seller may have several reasons for not accepting a lower than list-price offer.  Perhaps he'll be liable for taxes on the forgiven amount?   Not every transaction qualifies for the exemption.  Or maybe there were other terms he didn't like, like personal property or possession.  Nope, it's not up to the bank, it's up to the seller SUBJECT TO approval from the bank as to the net proceeds.

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Permalink Reply by Teresa Keeler on May 6, 2013 at 9:17am

This is a difficult one because in that price range the market has a lot more "leeway" if you will. The banks will and do accept lower than market value offers on high end properties due to the fact that they REALLY clog up their balance sheets. Perhaps if you (Dennis) had more information it would be helpful to try to determine if indeed your investor's offer is too low. Are there repairs?  Who is the investor on the short sale (i.e - note holder)? How far behind is the seller and is there a true hardship?

Many times these issues weigh far more heavily on the bank's decision to approve that the full market value being paid. What if there never is a 1.9 million dollar offer?  Does the seller know that even if the bank takes the property back in foreclosure there could still be tax consequences?

I agree with Joseph the seller needs to be educated as to what the true goal is - avoid foreclosure, deficiency judgments, and if possible, taxes.

Lastly - Dennis - can your buyer justify his or her offer? Are the low comps? Does the property need major work? Is it irregular compared to other high end properties?  Just because the bank "feels" the property is worth 2m doesn't mean that it truly is or that they won't accept a lower settlement.

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Permalink Reply by Ben Benita on May 7, 2013 at 11:14am

ALWAYS case by case, but we will generally take ANY offer in order to get things moving with the bank, and it is MUCH easier to stop a foreclosure with an offer in place.

ALWAYS ALWAYS ALWAYS case by case -  but generally speaking, get something in!!!

As with ANY negotiation, whoever is forced to give their number first loses.

If the bank REQUIRES an offer, go in low and let them counter.

Rule #1 for investors - you should be EMBARASSED by your first offer.

If you justfiy your numbers and how you arrived at them, it is MUCH easier to get accepted.

WAY WAY WAY to much to get into on here, but my 2 cents - tell the Selelr to take the offer and get things moving!!!

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