Making an offer on a short sale property

[nomoneynomore]

Can anyone please explain the process of making an offer on a short sale property? The owner has the property listed at $65k, but we were wondering if we could make an offer of $50 or 55k to start with. We don't know how the process works with the bank. Will they look at offers or just reject it unless you offer the asking price?

The owner's lawyer is in the process of "negotiating a final price with the bank". I am wondering if we go ahead and submit an offer before they get the final price, if they might just take it and move on.

Thanks in advance for any help!

[hopejones]

I was told the following by a realtor a few months ago when we were house hunting:

"The bank looks at comparable homes in the area of the short sale home. If the short sale home is selling considerably cheaper than what comparable homes are apprasing for, then the banks stick to the short sale price. You can offer a cheaper price, but there is a high likelihood that the bank will counterback with the original short sale price."

We did not put in an offer on the short sale home because we did not want to wait months and months for the deal to go through. Hope this helps somewhat.

[nomoneynomore]

Thanks for the info. I appreciate it.

[HHM]

It varies depending on the market, but the offer needs to be realistic. Yes, you can offer less, but your odds of actually getting the property decrease.

[nomoneynomore]

The main reason we would like to offer less is because the county appraisal is $59k, and a local real estate agent that is an unofficial appraiser (market analyst or something, can’t remember his title) didn't think it would appraise over $61k.

[HHM]

That's fine, all you can do is offer what YOU are willing to pay. The bank will either say yes or no. If they say no, you move on.

[nomoneynomore]

Thanks much on the replies to this. We found out today that this specific property is tied up in a huge mess. There is no light at the end of the tunnel. We have decided it is in our best interest to rent for a year & see what we can find house wise then. This is certainly not our first choice, but I guess everything happens for a reason.

[mijd]

In case you consider another short sale in the future, I can tell you they are not all difficult. I did a short sale on my condo in 2010 to avoid bankruptcy and closed within a month and a half after an offer was accepted. Each situation is different but the premise is the same. In my case I worked with a realtor and title company and decided on a selling price after checking comparables. The county assessment was completely ignored. The title company worked with the bank(s) getting them to agree to a short sale... in my case I had a HELOC with a $119k balance...and had to prove to the bank the selling price was reasonable for all the variables. A provision in the contract was the price would be lowered by a set amount every two weeks until the property was sold. It took the bank 3 weeks to decide to accept the offer. After acceptance we closed in less than a month. But others here are correct, it depends on the location, the bank, the seller and of course the condition of the property. A short sale can be a lengthy process but some really good deals can be had. IMO a bank would take a long period of time to accept an offer if the offer was less than original selling price.
Another factor favorable to a short sale vs foreclosure purchase is when a short sale is listed with a realtor, a contract is signed which have different conditions the seller has to adhere to. The bank (or title company) hires the appraiser and the realtor may insist the property be cleaned and presentable. People who short sell USUALLY have taken better care of their home as a short sale in some cases is a 2nd to the last option(before foreclosure). I've seen foreclosed homes that have been stripped inside and out.