Question about Short Sale Pricing...

This may have been asked already, if so I apologize for asking the same thing...

So we found a house we really like. However it is about $20 thousand more then we can afford to spend. Normally I wouldn't be concerned but the house is a short sale.

My realtor said that banks don't usually negotiate price.

Is this true?

What have been your experiences with short sales?

Message edited 1/7/2012 6:31:32 PM.

Re: Question about Short Sale Pricing...

you know, i hear this a lot know however I work in real estate..i process all of the deals so i see all the listing prices and then the selling prices and how long it takes, etc......i don't see that they don't negotiate on price but i also don't see as much anymore that they negotiate as much as they once were. 20K is not a huge amount when talking about housing and is an amount that a private seller might go down, and so would a bank possibly. my point, the realtor might be edging on the side of caution because a short sale can take a long time to hear back and especially if its lower than the listing price, they might not want to waste their time..and yours, if they are a straight shooting good agent. hth

Re: Question about Short Sale Pricing...

We found a SS that was listed for 299. The sellers agent fed us a bunch of bs about being approved and said if we offered 285 we should be able to get it for 290ish. The bank counter offered with 335! So pretty much the list price means nothing.

Re: Question about Short Sale Pricing...

It depends -- sometimes a listing agent puts a short sale house on the market without even informing the bank, and the agent has no idea what the bank will accept. In that case, the asking price may be way lower than the bank will entertain.

In other scenarios, the short sale is "approved," which can mean different things -- it can mean the bank knows it's on the market and has agreed to a short sale, and it can even mean that the bank has agreed to take that price. Most of the time, the banks don't indicate what price they will accept until there's an offer presented to them. But sometimes, with an approved short sale, there was a previous buyer for the house and the bank approved the sale at a certain price, but then the buyer couldn't get financing, so the deal fell through. If that buyer was willing to pay, say $300K, and the bank accepted it, then the house might go back on the market asking $300K as an "approved short sale", because they know the bank will take that price.

You basically need to do your due diligence or have your agent do it before you make an offer. Find out whether the bank knows the house is on the market, and whether the bank has approved the list price. You also wan to find out more about the sellers' situation... are they cooperating? Have they provided the necessary financial documents to the bank? Ask your agent what he/she is basing her statement on that the bank won't negotiate further.

Many agents still don't understand short sales and make a lot of misrepresentations about them, so beware! I am a certified short sale professional... you should find out if your agent is certified, and more importantly, what her experience with short sales is.