Short sale question

Dh and I found a property in queens we are interested in purchasing. On the listing is says short sale. Upon further Iinvestigating, the asking price of short sale is about 60,000 above the recent comps.

Even if we offered what the asking price is, it would not appraise for what we need, correct?

Would we be right to put in an offer closer to what the comps say?

Any insight would be very helpful

Thanks!

Short sale question

If these other houses are really comparables (similar house size, lot size, layout, year built, # of bedrooms and bathrooms) then I would put in an offer closer to the selling price of the comps.

I personally think you should get a buyer's agent who is experienced in short sales. The bank is going to have to approve the ultimate selling price and that may be a long process.

Re: Short sale question

Every lender is different in terms of what they will take. Most lenders now are wanting to recoup as much money as they can (so they want market value or close to it), but they all have different formulas, and it also depends on the type of loan the seller has (FHA, conventional, etc.).

So it's really hard to know! A good thing to do is to find out more information from the seller (or listing agent, if there is one), asking things like whether the bank knows the house is on the market, and if it does, does it know the asking price. Is it an approved short sale? Sometimes, the bank had an offer on a house that they accepted, but the sale fell apart because the buyer couldn't get financing. In those scenarios, the house comes back on the market as an "approved short sale," because the seller knows the bank will take the asking price. But other times, a listing agent prices a house well below market value to drive activity, but in reality, the bank will never accept that price. Sometimes the bank will direct that the agents put a house on the market on a price that's too high, because they are not well versed on the local market conditions or don't know the current condition of the house. It then becomes the real estate agent's job to educate the bank (with comps, photos, etc.) so that they will be more in line with market values.

It's also helpful to find out what bank or banks are involved, and who is handling the communications/negotiations with the bank. Is it a listing agent? A short sale processing company? An attorney?

A short sale can be a great opportunity, but for a buyer, there can be a lot of uncertainty. So it really helps to do your due diligence upfront, and having a good agent who is experienced with short sales can really help.

Let me know if you have any other questions!