I am a real estate investor. What's the safe percentage to offer a bank on a potential short sale? 50% to 60% off the current market value?

Thanks,
Tom
www.hoprealestate.com

More like 80%- 85% of fair market valueand then wait for negotiations, I'm not seeing many short sales close lower than that.

Depends on the condition of the property and what type of loan it is and a hundred other factors.

The key is knowing how far along the listing broker/agent is in the process.If you have a market declining at 2% a month.If you submit an offer at 85% of current value and get an approval 3 months later you are now paying 91% of market value.

If you are an investor time is money so you can't wait 3 months on a short sale as by then you could have rehabbed a property and sold it.

[quote=usbanklist.com]I am a real estate investor. What's the safe percentage to offer a bank on a potential short sale? 50% to 60% off the current market value?

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If they bank would be will to sell for 50% to 60% off market value, then home prices in that area must be in absolute free fall. It would be best to avoid that area period.

At 50-60% off market price in a slow declining market, the property probably won't get past the appraisal process and the bank will decline the short sale. If they think the numbers work better for them to foreclose they will send it to REO. There's a discount for short sale properties, but not usually half price, so there's either something wrong with the home or the agent isn't marketing it correctly.

My agent told me that he'll meet with bank's BPO agent to prep them all the problems with the home, market condition, neighborhood condition, etc, to get them lower the value.

You must be new to short sales.Good luck with that one.That ship has been sailing for years and has sinked many times.

You are better off low balling with a cash offer on an REO that has more problems than regular home buyers want to deal with.The nasty scary looking homes is where the gold is.A regular home buyer on a property needing a little carpet and paint will beat out your offer every day of the week as they are happy with just 10 to 15k equity.As an investor the equity spreads required are much different.

I do those BPO reports and even when the listing agent gives me comps I throw them away. Not allowed to have anyone influence the report, can't even discuss it. Besides, lenders not only use an appraiser and 1 or 2 BPO agents, but also valuation software. Have you started bidding on properties? You don't want to be that buyer spinning your wheels. Time is money as well.

I agree with super realtor, find yourself a good crew of contractors. Look for REO deals, especially ones with long days on market. Find out why and see if there is opportunity there.

Your agent is full of it; as others have said you should be focused on REO's with lenghty listing periods, that would give you the best shot at a property dramatically below value...

Can you say illegal, immoral, unethical? If a BPO agent accepts anything of this sort, at least for most companies, we are required to report it to them immediately. We can have complaints filed against us by the Division of Real Estate, and possibly (probably) have punitive actions taken against us?

*Any* decent Real Estate Agent, BPO, or otherwise, will already have their market area, and neighborhood conditions down to a T. If they don't, they best start looking for other employment. Also. The the selling price of a home is what a willing, ready, and able buyer will pay. Nothing is going to change that. Real Estate 101.

Climbing off the soap box...

I just closed a deal where the buyers were a middle-aged couple buying their first home. Their accepted price was approx 51% of the original list price. They used FHA state bond money. They also got $2700 in repairs and $2000 in closing costs as part of the deal. That's not the "typical" short sale deal around here, but that does occasionally happen. I had the buy side and the listing side was handled by one of our top producers & the gal who manages the short sale dept.

And an agent doing BPOs should never be swayed into setting an amount by the broker or any Realtor. That's a big no-no.