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Short Sale Advice - How Much Should I Offer on a Short Sale Offer to Purchase?

By Steven Wood

Real Estate Agent with Advanced Realty Services, Inc

February 06, 2008 04:09 PM

Hi Gretchen (Name Changed),

Sorry about getting back to you so late in the evening.

Gretchen wrote to me the following:

> If we do make a bid it will be less than $290K. The offer would be
> preapproved, backed by cash, and with inspection waived. Which make it
> strong, however, If you don't think that is worth submitting due to
> being below recent comps, let me know. I do not want to waste anyones
> time.

There are 3 particular items that makes an offer STRONG in a Short Sale.

1) Price,

2) No Contingencies, and

3) Price.

There are 3 particular items that makes a Lender want to accept a Short Sale Offer.

1) How much money will be netted on a Short Sale, versus how much money will be netted on a Foreclosure,

2) How STRONG is the Short Sale Offer, and

3) How much money will be netted on a Short Sale, versus how much money will be netted on a Foreclosure.

You have Item #2, No Contingencies!

The other 2 Items, have to be addressed...Price and Price.

This is NOT a new property. This is a property in a fantastic area! The Builder has just sold a 3 story, larger unit, for a very small price (I showed you a recent Palm Beach County Property Appraisal Office Public Access System's run of all sales in the subdivision.)

In Florida, there is no Legal Requirement, by anybody, including Licensed Appraisers, Real Estate Agents, BUILDERS, Homeowners, Public/Government Servants, Experts that perform BPO's, et al., to show Seller's Concessions or Subsidies. I really am not for this practice because how can the PUBLIC, the BANKS, the LENDERS, People from out-of-town, etc., tell what the MARKET VALUE of a property IS (It all depends on what the definition of IS IS!)

Please make an Offer. Make it your BEST OFFER. And, expect a long passage of time before you get an answer back from the Lender. Don't count on your offer being accepted. Somebody else may put in a Stronger Offer!

In a Short Sale situation, nobody knows or can predict, what a Lender will accept. The Lender is the one that will make the decision on which offer Best Suits THEM.

Steven P. Wood, Realtor
Short Sale Specialist with the Short Sale Division of
Palm Coast Realty, Inc.
Palm Beach Gardens, Florida 33410

Direct:    1-800-298-2566

eMail:     Steven_P_Wood@msn.com

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             http://stevenwood.point2agent.com/

Office:    1-800-298-2566
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I am at Your Service for ALL of Your Real Estate Needs, Specializing in Jupiter, Juno Beach, Tequesta and Palm Beach Gardens !!!

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Vickie Nagy

Coldwell Banker Residential Real Estate - Palm Springs, CA

Vickie Jean the Palm Springs Condo Queen

You have a nice way of phrasing up the important points. Thanks for sharing.

Feb 06, 2008 04:12 PM

Jon Zolsky, Daytona Beach, FL

Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL

Buy Daytona condos for heavenly good prices

Thanks,

Still, it does not mean, that you can't get a mortgage, it is just that you are sure you can get it, you can waive the contingency and write it as cash offer. Am I correct?

In a situation with identical offer, the one with waived contingency would have a better chance?

Feb 06, 2008 05:12 PM

Steven Wood

Advanced Realty Services, Inc - Jupiter, FL

Hi Jon,

When you write an offer as a Cash Offer, you are saying that you have the cash to make the purchase.

To make the Cash Offer stronger, you will need Proof of Funds.

If you care to get a mortgage, instead of using your cash, you can; however, your Lender may not allow for the mortgage at the last minute, and you will then have to use your cash.

There are many reasons on why a Lender may not allow for the mortgage. So don't feel confident that the Lender will lend you the money.

So, a Cash Offer is Stronger than an Offer with a Loan Commitment from a Lender. And an Offer with a Loan Commitment from a Lender is Stronger than an Offer with a Contingency on Purchaser obtaining a Mortgage Loan without a Loan Commitment.

Yes, your assumption is correct. Where 2 Offers are the same except for a single difference where one offer has a contingency and the other offer does not have that contingency, the other offer is the Stronger Offer.

Feb 07, 2008 12:04 AM

Steven,

Thanks for taking the time to answer, and you helped me to understand an important difference. I appreciate it very much.

Feb 07, 2008 05:17 AM

Are there any other folks that have any questions about Short Sales? Please ask!

Short Sales are a lot of work. It is almost like you need to have the disposition of a Social Worker!

The task at hand may prove rewarding.

When it happens, you are the proud mother or guardian!

Mar 07, 2008 04:27 PM

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