Hello,
I though i'd post this question on here just for motivation on my part and a clearer idea of what is going on.
I found a house for sale...semi-short sale 188k
compts show its worth just about that give or take 10k
I contacted the agent via email and she called me and to sum up our convo was.
"I have invested for many years and know what the houses are worth", "I dont think the bank will take an offer that low as they just did an appraisal on the property",
"The houses in the area that i compared are about the same price, so the value for this home is fair"
These are the things the agent said..I feel she is talking from the view of a uneducated investor in my opinion, i wanted other people's input so i know how to think and handle another agent with this thinking.
The status of the house is they are coming close to foreclosure, have a short sale package set up with the bank already, been on MLS since winter not sure if payments are behind, forgot to ask.
All input would be great, i tend to give up to easily, so when i hit this wall i figure i'd post it up.
Hello!
You said that comps are give or take 10k. This tells me that the house is listed for a retail value. Investors shouldn't pay retail.
You contacted the agent. I will assume this is the listing agent. The listing agent wants to sell the house for as much as possible.
If the house is going into forclosure, then yes, the payments should be behind otherwise the bank wouldn't have to forclose.
What is it that you want to do with this property? If wholesaling, you need to get a better price. If you're planning on keeping it as a rental, will rental prices pay for that mortgage as well as all of the other costs? You would have to rent that place out for at least $1500 to come close to breaking even.
I'd recommend watching the last 2 video blogs. They deal directly with this topic.
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Thanks.
That was what i was thinking as well, i did see the blogs and just wanted to confirm. I contacted my agent and we are going to put in an offer for 120k and see what happens. I felt the agent was just trying to squeeze out every dollar she could, and as you said she is..
Thank you for your input, imma put in this offer and see what the bank wants to do
!!
What do you plan to do with this property? Does it need work? How much are the taxes? I'm just trying to double check to make sure that 120k isn't still too much. Play the roll of William Shatner in the Priceline commercials...
The bank can:
counter
accept
reject
ignore (i.e. re-submit an offer later)
Hopefully you'll be able to get your win-win-win scenario.
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Please fill out your profile with as much info as you're comfortable with.
Thanks.
Either its short sale approved or its not
Educated investor or not, if the price is set there normally isn't too much wiggle room unless you're able to close in cash and in 5-10 business days
Good luck on the offer however
After our talk i told him i wanted to do 120k, he thinks it is a good price saying most houses in the area sell for 180k
There is no work to be done, it is pretty much move in ready. The owners seem to down graded in work meaning less money to pay bills.
My intensions really are to ether double close it to one of my investers or flip it real quick
As in closing i can close within the week as i always have my buyers show me a proof of funds before i go though the deal. The agent told me "Cash or not the bank wont care"...this was in regard to offering a lower amount then the 180k listed
Like you said before she is just trying to get the most she can, seems to be true here. As i heard at the EDGE program "Cash is king" and even my agent said "If you have the money in your hand you can close A LOT faster and the bank will favor your offer over someone that is financing the property".
What do you think so far..I feel i am going the right direction and this listing agent is just trying to make the most she can.
As long as the house fits the profile that your buyers want and that the profit margin is acceptable to both you and your end buyer it sounds good so far. Keep us informed please.
Good Luck.
The more thorough the question, the more thorough the answer.
Please fill out your profile with as much info as you're comfortable with.
Thanks.
As in closing i can close within the week as i always have my buyers show me a proof of funds before i go though the deal. The agent told me "Cash or not the bank wont care"...this was in regard to offering a lower amount then the 180k listed
So i'm clear;
House is listed for $180k
Agent doesn't care if you offer $120k
Says bank doesn't care if its cash or not
Doesn't sound right. Truthfully, I would expect a long wait on reply or a counter closer to the full price asked for.
The bank doesn't care comment doesn't sit well with me at all
Yes, to follow up with what Elix said, I've done short sales before, and generally the bank won't accept much lower than the appraised amount. And do expect it to take a while. In the last one I did, it took 6 months to get it all done.
- Tom
Most of the times, lenders like to use Broker Price Opinion, which is basically having a realtor and appraise the property. This is much cheaper to the lender than having a licensed appraisal. There are lots of agents that are doing this type of work and typically appraised using the fair market values and do not analize if the market goes into the foreclosure pile. However, lenders normally ask to appraise the property for a 90-120 days as-is selling price and 30 days as-is selling price. Good luck!
Tom and Jeri
www.TuCasaInvestors.com
www.TuCasaRealtyllc.com
That makes a lot of sense, this agent did say this property was not that old, I believe what i am going to do is put in the offer for kicks, if it gets rejected or what not i'll just wait it out a few months and try again...
And the comment of "The bank doesn't care" was kind of odd to me, as she said cash or financing would not help me with a lower than offered price. From what i have read most people that use cash get away with lower price offers and buys.
Ether way imma do the offer and play the waiting game and see what happens..i got nothing but time
As in closing i can close within the week as i always have my buyers show me a proof of funds before i go though the deal. The agent told me "Cash or not the bank wont care"...this was in regard to offering a lower amount then the 180k listed
So i'm clear;
House is listed for $180k
Agent doesn't care if you offer $120k
Says bank doesn't care if its cash or not
Doesn't sound right. Truthfully, I would expect a long wait on reply or a counter closer to the full price asked for.
The bank doesn't care comment doesn't sit well with me at all
I agree, it was kind of odd how the convo went. After reading some other post i see other people have ran into the same problem with agents pushing the sale price they have. Imma just do the offer and go from there...buying at 180k will break me even.. imma start low at 120k and work my way up and try to get below..I dont except them to accept a low offer, but its easier to talk up the price than it is to talk down the price
The short sale is not approved and he's using your offer to show the bank it should lower the price, never intending to use your offer as a vialbe buyer
Using your offer to show the office that the house is not DOA. Sometimes a house that never gets offers may be given back to the bank or yanked and he's showing that there is life in it
Using your offer to show the broker they are not wastes of time and can actually sell real estate. Some agents will take any offer no matter how absurb and hope it sticks and/or if he's not producing might be in line to get released
It happens. If you're ok with wasting your time and want to put the offer in, by all means, but it doesn't come off legit
Short sales can be a rock and a hard place and here's why... What most people don't know is that sometimes banks have insurance policies out on the mortgages and when the property goes into short sale status the bank is required to accept any offers HOWEVER...
If they have a policy on the house (like what a friend of mine had happen) they will in a sense reject EVERY off no matter how good because the foreclosure process allows them to file and collect on the full amount.
In my friends case his short sale offer was for 203K, then the home was appraise at somewhere around 200K but the the bank had an insurance policy in place for 225K so guess who looses out...
The kicker is my friend had a renter then did ALOT of improvements on top of an already nice home and the bank never factored that in because they just look at raw costs of the initial purchase.
John 14:6
convince the selling agent that putting in the offer is going to get the whole short sale process started; it will never get started without an offer. We want to see what the bank will come back with and are starting low. The agent has to remember, they are representing the SELLER , NOT the bank. Chances are, if she is a good short sale negotiator (ahhemmm *cough*), and this is the seller's primary residence, the seller won't have any money out of pocket no matter what price the home sells for. But, the only way the short sale process will START is if there is an offer. If its been for sale since winter....
Also, if you are talking to the listing agent or your agent, either yourself or your agent needs to talk to the listing agent about the seller's documents and make sure that they have prepared all the hardship paperwork and that the seller DOES have a hardship, and that they have all their documents ready to give to the bank. Remember, banks get a nice 'cover' from the government for any shortages and usually make much more in the short sale than a foreclosure. Here in CA, it costs a bank at least $58K to foreclose, plus holding costs. So long as the listing agent has prepped the sellers correctly for the short sale, she should be interested in her SELLER'S needs, not the BANK's needs... The goal is to have the short sale succeed so HER client does not go through foreclosure; not to maximize what the offer price is on the house. Her fiduciary responsibility is to her client, not the client's bank... Many agents 'MISS' this critical roll in their position of the short sale.
THat was intense reading right there, thank you.
The agent did say she had the owner's paper work ready however they have not got any offers to put though yet. I really liked your comment and had to read it a few times and it seems, i should put in this offer to get the ball rolling.
Me and my agent are getting all the paper work and court house stuff to make sure there are no liens or anything on this place and if all checks out okay we are going to put in a offer and see what happens..
Thanks again guys, this has been a crazy learning experience for me
Definitely cash is king. However, the process on Short Sales is very slow. They don't seen to move any faster and cannot understand why. I am working on a Short Sale for a client that I am representing and it is already taking 2 months!
If it doesn't work out, just move on to the next one as there are so many out there. The important thing is not to be emotional and attached to a piece of property as this is just our business. You sure have the right attitude when you said: "i am going to do is put in the offer for kicks, if it gets rejected or what not i'll just wait it out a few months and try again" Good luck!
Tom and Jeri
www.TuCasaInvestors.com
www.TuCasaRealtyllc.com
i just had a similar convo with a listing agent of which the house is listed just about market price and she stated that my offer is too low and that the bank wont accept it. i asked her to submit it anyways and she "claimed" that she would. I know the seller and the seller is on board with me and called the listing agent as well to submit my low offer. this is my first offer ever so im hopeful that however long it takes (agent says 30-45 response from the bank)it will be worth it.
Esmirna Maloon
will do keb;
yes i thought that was a lil too long but i just went with it and will look at other deals while she does what she will do. ill keep you posted.
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Esmirna Maloon