Short Sale Sellers20 to 25% Under Loan Amount Reasonable?
The only way to determine the amount of the offer is to look at the FMV (Fair Market Value) for a home, area and neighborhood, including the square footage and year of the home. You should have a real estate professional run the numbers and review the sales trend for that neighborhood over the last 3, 6 and 12 months.
A general rule of thumb is 80% for a conventional loan. 82% for a FHA and 82.8% for a VA of current market value. The current market calue is what it will cost the bank to take the property to foreclosure. When the bank receives the first offer, it will trigger the bank to do a BPO or Appraisal which will determine if the loss mitigator will consider the offer. The offer is then weighed against what the bank will get if it does go through foreclosure. It make take up to 60 days for the process so other offers may come in.