Author Topic: Need your help to estimate reasonable offer on a short sale  (Read 1272 times)

Krolik

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My husband and I are considering making offer on a short sale property that would be our primary residence (not an investment). The house is in a good shape but will need  some updating (mostly cosmetic).

House was listed originally for $339K in May and a week ago they cut the listing price to $300K. Zillow estimate is $350K. This is an average home price in our area.

We went to see the house and it would be perfect for us, very close to work, beautiful community, great schools, move in ready.

Our real estate agent emailed us comps for the area showing that similar homes (but 300sf smaller, 1 car garage) sold recently for 280K. However we know the area really well and these homes don't compare well.
The house that we are considering is much nicer with 2 car garage (my husband's dream), in nicer community and better schools.
However I also realize that seller's bank will look at the same comps and they will have no personal knowledge of the communities / areas.

My question is: is it stupid to start high and offer 280K (market value, based on comps)?
I also read somewhere that in case of short sales the rule of thumb is to offer 10% lower than market value (based on comps) which would bring our offer down to $252K. My gut feeling is this is really low and I don't want to be rejected outright.

Should we offer the market value 280K or risk being rejected and start lower?

I am really looking forward to your comments/advice and thank you in advance for your help.
« Last Edit: June 17, 2015, 09:19:03 AM by Krolik »

Another Reader

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Re: Need your help to estimate reasonable offer on a short sale
« Reply #1 on: June 17, 2015, 11:16:10 AM »
Market value based on comps is not $280k.  The comp you cite would have to be adjusted to the subject property for the 300 square feet and the additional garage space.  Also location, if there is a provable difference in price, would need an adjustment.

Zillow is not useful, for the same reasons.  The valuation algorithm relies on good comps, which don't really exist.

Banks have better control of the market now so getting a short sale for a low offer is less likely.

What does your agent suggest?

Krolik

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Re: Need your help to estimate reasonable offer on a short sale
« Reply #2 on: June 17, 2015, 11:25:35 AM »
Thank you Another Reader.

Our agent said: '280K offer is reasonable'

Another Reader

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Re: Need your help to estimate reasonable offer on a short sale
« Reply #3 on: June 17, 2015, 11:37:53 AM »
From what you have said, market value may be higher than $280k.    In your shoes, I would ask your agent what is the lowest reasonable offer and start there.  You could try $270k, which is 10 percent below the current asking price, but you could be rejected outright because the bank has no support for that number.