Short Sale Home » Short Sale Buyers » How Much To Offer on A Short Sale?

Especially in this market, there are questions on what to offer on a property.  If you are buyer and have done your research, most homes listed on the MLS are possibly short sales.   So what to offer on a short sale?  There’s no right answer.  More, if you you want the offer you make to be accepted.

Before a short sale offer is even considered an appraisal called a BPO (Broker Price Opinion) is completed.  The assessment will be to consider what the current value of the property and the BPO gives a general idea of the value based on comparable sales and listings in the area.  The bank will also completed a BPO before considering your offer on a short sale and will also do this for REO listings.

So, now that you know what the bank is looking at, how do you decide on an offer.

What should you offer on a short sale?

If you love the neighborhood and the home, you will want to offer between 10 to 15 percent below what the most recent sales have been.  If you want the lender to pay for closing costs (which are typically 3% of purchase price) stay closer to 10%.

How low should you offer on a short sale?

Your real estate agent will be best to answer this questions.  The listing agent will reject an offer if they feel it is too low.  An offer that is not supported with any market history will jam up the process and results in no offers accepted by the lender, at all.

What’s the maximum to offer on a short sale?

It is not possible to purchase a home more than what it is worth if you have a credible and honest appraiser.  The bank will not lend the additional money.

How much is the home worth now?

An experienced agent will give you a list of properties in the area sold (comparables).  They will also provide a detailed report of the current market in the neighborhood you’re shopping in and give you the information you need.

If you have an MLS number, you can find out how long the home has been on the market and how many times the home has lowered the price (even ziprealty.com will show this info).  Knowing the history of the home is powerful to use in negotiations.

Tags: broker price opinion, comparable sales, current market, real estate agent