Need help on counter offer
Background on this SS
1. Not preapprove SS. Only one lender (first loan)
2. Seller has moved out (approx 2 months) they took the refrigerator, fans, and washer/dryer. No big deal
3. Mls listing $480,000 to $550,000. We offer $480k since other homes in the same street/neighborhood was selling between $434 to $460k and there was items that need to be fixed.
4. Seller agent accept the offer and moved the mls status to "contingent."
5. Seller agent says appraisal was done and gave us a heads up, saying the appraisal came in much higher than our offer. He is saying it should be around the upper $550k.
Based on my understanding we will not see the appraisal documents, just the counter offer from the seller. In addition there is a range the bank will give the agent, one to kill the deal and the other is the ideal sell price. Anything in between may be considered by the investor. I feel unease because this is my first SS and my level of trust with the seller agent isn't there. When the seller agent accepted our offer (#4) above, he still hosted a open house without giving us a courtesy heads up. I found out on my own while surfing the web. When confronted, he owned up to it and said he wanted to have the opening to get prospective leads in the neighborhood. The neighborhood was build in 2004/2005 and everyone is prett much upside down. He also said the home was not available and that he has already submitted the offer. So, here is my questions:
1. Is it legal even to have a open house after committmenting to a offer?
2. Is there a range the bank/investor will accept? If my offers $480 and the appraisal is $550, is this too far them to consider? The delta is $60k.
3. Who pays the realtors commission? If its the bank, is that number worked into the sell price or is that additional?
4. The appraisal was completed a few days ago. Is the counter letter written by the bank or the seller agent? My concern is this agent has his interest at heart and trying to bump up the asking price. So if there was a range, I have a feeling he is going to pick the higher range since he is communicating this in advance.
5. Any suggestion on the negotiation? As I mentioned above there is repairs that need to be made. Do I counter, submit photos and be estimates/quotes for repair to attach? In addition, other listings have closed for less. Is it worth while to include or should I get a 2nd appraisal done on my own; out of pocket?
Replies to This Discussion
-
Permalink Reply by Kelly W. Maynard on
-
Hello,
Did the listing agent write up your offer for you? Or are you representing yourself? Did you sign a document that says the listing agent is representing the Buyer and Seller?
With a short sale, I am sure the agent can hold the home open to receive back up offers. The bank typically wants to net 88% of the fair market value. That means that the commission, closing costs, HOA transfer fees, and all other fees that must come out of the proceeds, must be deducted from the gross and the banks net must be 88%.
The counter comes from the bank.
Usually a short sale is purchased "As Is" and no repairs will be done. Nothing comes out of the Seller's pocket. If you request repairs that will come out of the proceeds the bank receives and they must net 88%.
It is NEVER a good idea to go completely unrepresented in the purchase of a short sale or Lender Owned property.
The listing agent can appeal the appraisal, and if it is truely inacurate can submit comps and repairs to reflect the true value.
The bank may request the Listing agent change the MLS to reflect the fair market value and start the whole short sale process over again, looking for an offer that matches the asking price, or is very close (if it is possible that they can get an offer). After a certain amount of time, the bank may accept lowering the price, etc.
Hope that helps!
Kelly
-
-
-
One more thing. The "appraisal" is ordered and paid for by the bank to obtain the fair market value. So the listing agent is not interested in getting "more" for the home. He wants to help the Seller, who he represents, do a successful short sale. The listing agent does not want to make it impossible to get an offer and successfully close. Trust me, the listing agent does not want an unrealistic price for the home. He wants a price that is low enough to get an offer, and truelly reflects the fair market value.
In all the short sales I have done, I have never been given the opportunity to view the "appraisal" or "BPO" on a property.
-
-
Permalink Reply by Mei truong on
-
I have an agent representing me. And you are right, doesn't sound right for 1 agent to represent both. Sounds like a conflict of interest.
Your response is very detail and helpful. If the appraise value is $550 then the fair market value is $484, add in commissions and all the other fees, it would be closer to $550. I guess I have to wait for the bank counter offer. Thank you again for your help. -
-
-
Your welcome. Wishing you the best.
-
-
-
I will post the outcome - good or bad.
-
-
Permalink Reply by Satar Naghshineh on
-
Chances are the listing agent left the purchase price at 550k range so the bank's appraiser (called a BPO) just used the listing price as the value of the property and went back to Bank of America and said to BofA that it is worth 550, so now BofA wants 550k. What the listing agent should have done was to put the property in backup mode (or whatever you call it in your area) and lower the listing price. The listing agent should have met the bank's BPO and give him/her 3 low active comps and 3 low sold comps along with a high contractor's bid for the cost of repairs.
Anyway, to answer your questions:
1. Yes. As long as contingencies are not removed from a purchase contract, the seller can solicit other offers. Well, the more I think about it, they can solicit offers until the transaction closes!
2. It's close. I am in Southern California and I work in this price point. If Bank of America thinks it is worth 550k, 500k might be as low as they will go.
3. The seller's foreclosing lender pays for it. It's based on the sales price (usually).
4. It's from the bank to the listing agent. The listing agent then tells your agent. Your fear is mostly wrong as we rather close this deal as a listing agent then try to squeeze an extra $1000 in commissions.
5. Yes, have the listing agent submit 3 recent low sold comps and 3 low active comps along with a high contractor's bid showing how much it will cost to repair the property. I do not recommend you pay for anything.
If you lose this short sale, I recommend you make low offers on other short sales and go with the first one that gets approved to the terms you like.
-
-
-
180 degrees. The seller agent told my agent that the bank shot down my offer and is going with another offer. Seller agent wants me to execute a cancellation document. From everything I research so far I did not see this one coming. I was waiting for a counter offer. Any thoughts?
-
-
-
banks do not go with other offers. The seller owns the home and chooses which buyer to go with.
-
© 2024 Created by Short Sale Superstars LLC.
Powered by
**********************************
like buttons