Potential short sale? Home value?
My husband and I are going to look at a house tomorrow and meet our realtor there, I am just trying to better understand a few things before we go. I have a list of questions to ask the realtor as well but hopefully someone can help me make more sense out of this.
The home we are looking at is vacant, the notes on the website say “potential short sale”, what exactly does that mean?
The home was purchased in 2006 for 380k, it was listed first for 300k, now, 60 days later it is down to 275k. To me, it doesn’t seem like the current owners will be making money off this home either way so if we do put in an offer in the low 200′s would they be more inclined to accept it and be done with the house or let it fall into short sale? (your experience with this?) Similar homes in the area and neighborhood are listed in the 240′s range, but this home does need some work done before we could move in, a few appliances are needed.
Anyone have any help or advice, I would appreciate it. Thank you!
Simpson- (I hope you get back on to read this…) If it says POTENTIAL short sale, does this mean that currently the bank is even involved or usually does it mean that if the house doesn’t sell soon that it will become a short sale. No where is the home advertised as an actual short sale which is what made me so confused about it..we did luck out with our agent, she is bringing all of the info with her tomorrow, she was out of the office when I called her. But, I did meantion the price and her words to me were “I’ll handle that don’t worry”, she is part of the “team” that has the house listed.
Thanks so much! Hopefully what I said just made some sense!
A short sale means that the owner and bank are willing to sell it for less than what is owed on the mortgage.
I can’t really even guess what the owner and the bank will accept, but if it’s listed at $275,000, the chances are slim that they will approve anything in the “low 200′s”. I mean that’s 25-40% less than list.
The ONLY way a bank would even consider it is if your agent knows what she is doing and can provide comps showing that similar houses are >selling< for $240k (not listed at) and lists how much the work and appliances will cost. You should have an agent that is short sale experienced and experienced in playing hardball with the bank. Most of the newer agents, or even older wishy washy agents, can’t handle this type of negotiation.
Edit:
“If it says POTENTIAL short sale, does this mean that currently the bank is even involved” No, it means that the bank will be involved if the offer is below what is owed on the mortgage.
“or usually does it mean that if the house doesn’t sell soon that it will become a short sale.” Short sales are not foreclosures. The length of time on the market does not dictate whether or not it’s a short sale. It’s solely about sales price vs. what’s owed to the bank.
Simpson is correct.
Even if the buyer accepts $100 and a happy meal for the house, the bank *must* approve it, which they likely will not do.
potential short sale usually means that at the list price it is not a short sale but if they go any lower it will be. As stated the biggest mistake buyers make it to really low ball a short sale. They are already asking the bank to take a huge loss, so it is not a good idea to ask them to go even lower. Short sales are already priced to sell quickly.