Buyer question: Short sale offer amount?

Hi, I'm new to this forum and to the short sale scene so pardon me if my questions are dumb.

We found a house we really like here in Florida (Gulf Coast) and are trying to get the best deal for it, We have a set budget of $175k-180k.

Bank (Chase/Morgan) already approved twice a $190k offer but both times the deal fell through on the buyer's side.

I read on some places online that banks will accept offers ~80-85% off BPO so based on that, I submitted an offer for $175k

Here are some numbers/ Info I gathered (hope I got them right)

Asking price: $199k

BPO: ~$210k

My offer: $175k

Amount owed: 1st Lien ~$240k, 2nd lien: ~$30k (same bank for both liens)

2nd lien holder only gets $5000 out of the sale

Type of loan: unknown yet (guessing conventional? Seller bought the lot, I'm guessing that's what the 2nd lien if for and had the house built)

The real estate agent is sending our offer out to the bank (seller just signed) along with some "low ball" offers (not signed by seller) hoping to get a bank approval.

So how does these numbers look to you? Any chances on having this offer approved by Chase/Morgan?

Thanks!

If the BPO came back at 210k, then 175k seems about as low as you can go in a declining market.

Asking price: $199k - Irrelevant

Amount owed: 1st Lien ~$240k, 2nd lien: ~$30k (same bank for both liens) - Irrelevant

2nd lien holder only gets $5000 out of the sale - Same bank, then irrelevant

Type of loan: unknown yet - Irrelevant

"The real estate agent is sending our offer out to the bank (seller just signed) along with some "low ball" offers (not signed by seller) hoping to get a bank approval."

Although I understand the logic as to why she is doing this, it won't help. She's basically telling the bank that the offer she has from you, is better than the other offer she got and the bank should go with your offer. Instead, I suggest for her to download a Fannie Mae BPO and fill it out and submit it in. Maybe even find out how to contest the value or see when the valuations expire so she can have another BPO ordered. Hell, providing her marketing timeline on the MLS is better than sending in unsigned purchase offers that will confuse the negotiator.

This is another case of a real estate agent that is treating a short sale like a real estate transaction rather than a debt settlement. Gotta love them.

Replies

Gab July 31, 2012 at 7:49am

Just an update, we are still waiting to hear back from the bank. I did found out that the sellers are using a lawyer/negotiator. The listing agent just told me that we might be getting some updates this week.

Had to send an updated pre-approval letter two weeks ago (dont know if its a good sign?) and I was able to find out how much the new bank ordered BPO came out to be: $198k.

Crossing my fingers!
Satar Naghshineh May 9, 2012 at 1:55pm

If the BPO came back at 210k, then 175k seems about as low as you can go in a declining market.

Asking price: $199k - Irrelevant

Amount owed: 1st Lien ~$240k, 2nd lien: ~$30k (same bank for both liens) - Irrelevant

2nd lien holder only gets $5000 out of the sale - Same bank, then irrelevant

Type of loan: unknown yet - Irrelevant

"The real estate agent is sending our offer out to the bank (seller just signed) along with some "low ball" offers (not signed by seller) hoping to get a bank approval."

Although I understand the logic as to why she is doing this, it won't help. She's basically telling the bank that the offer she has from you, is better than the other offer she got and the bank should go with your offer. Instead, I suggest for her to download a Fannie Mae BPO and fill it out and submit it in. Maybe even find out how to contest the value or see when the valuations expire so she can have another BPO ordered. Hell, providing her marketing timeline on the MLS is better than sending in unsigned purchase offers that will confuse the negotiator.

This is another case of a real estate agent that is treating a short sale like a real estate transaction rather than a debt settlement. Gotta love them.
- Gab > Satar Naghshineh May 10, 2012 at 3:00am
  
  I see. Well I called her yesterday and she reassured me that she knows what she was doing and that she has been in the business since 1994 and done hundreds of short sales so...will see how it goes, my offer has been submitted to the bank.
  
  (Also what I gathered is that it was on a FHA loan and HAFA short sale program...dont know if its better for the buyer than a conventional short sale of what)
  
  Thanks guys for your input!
  - Jeff Payne > Gab May 11, 2012 at 4:40am
    
    OK, I just spit coffee all over my screen when I re read hundreds of short sales, Gab check your PM box
  - Jeff Payne > Gab May 11, 2012 at 1:34am
    
    Gab, PM me her info, I can look her up in MLS and we can find the truth, privately. I would bet my next commission check that she has not closed more than 10 on the sellers side, if any.
    
    jeff.payne@kw.com
    - Gab > Jeff Payne May 11, 2012 at 4:05am
      
      PM sent, thanks Jeff.
  - Satar Naghshineh > Gab May 10, 2012 at 5:57am
    
    Makes no difference to you other than some lenders who are processing HAFA short sales are taking longer to do so than a normal short sale.
- Joseph Alfe > Satar Naghshineh May 9, 2012 at 8:32pm
  
  everything is irrelevant because most likely the BPO is expired and they will get a new one. No guarantee that the bpo will not stay the same, go down, or go up.
  - Satar Naghshineh > Joseph Alfe May 10, 2012 at 5:59am
    
    Good point. I was under the assumption the BPO was the result of the buyer's purchase offer but re-reading the question, it looks like that the BPO could be an old one.
Jeff Payne May 9, 2012 at 5:46am

Hold on one minute, the agent is sending in your contract PLUS low ball offers? Why in the world would they send in an offer? There is a big difference between a contract and an offer.

Who is the investor?

Has this agent ever done a short sale before? Are you working with the listing agent or do you have an agent?

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