Bank did not like short sale offer, what's next?

I’m currently working with Select Portfolio Services.

I have a homeowner that has a balance of $335K. He owes the bank 10K in arrears.

I submitted the short sale packet and an offer to the bank $302K and some change

Comps in the area, same spec and subdivision around $330K-340K.

The BPO came to the house two weeks ago, took pictures of the house, wrote a report and submitted a value of $335K to the Select Portfolio Services.

I get a call back from the bank today and they said that my offer is too low.

I asked them, what price would you accept and ok with with it. They wouldn’t give me an exact number but did hint that, in order for them to accept an offer, it has to be around $335K-$340.

In my area which is Las Vegas, the houses are not appreciating like they did back in 2004. This homeowner has only owned the house for 1 year and has no equity.

What should I do next? What are some tactics that I can use when I call them back?

It’s time to wish the seller’s best of luck, and move on, and be thankful that they didn’t accept.

Next time, you might want to review your numbers. A $300K offer on a $330K FMV property would barely cover closing costs and agents fees. Definitely not any rehab work.

As to tactics, the lender is going to lose $$$ if they have to foreclose, alot more than $35K. They’ve already in the hole $10K. That could roll up to $15-20K before they actually proceed with the FC. Then the homeowner could file for BK and hold off the FC another 6-12 months (all without payments). Not to mention that while the property looks good now, who knows what it will be if the sellers are forced into foreclosure? Damaged properties don’t get retail offers. You mention that properties aren’t appreciating as before, do you think that you’re looking at the start of a depreciation cycle? If so, then the bank might want to consider that as well.


Is there any way that I can make the bank realize that they will be spending more money to foreclose on the house than to accept a discount at $302K?

I can’t really find any articles online that break down what has to be spent to foreclose. Like any legal fees, taxes, and bad books on the banks record. I want to re-submit the offer and show them why they should accept my short sale offer.

In theory, will the banks be spending or losing more money than my offer at $302K?

Here is the way that I would approach the situation if you want to pursue it. Even if deals are thin you can still make money. If the BPO came in at 335k if this property becomes an REO first they will have to take it all the way through foreclosure. If they haven’t sent the package to the public trustee this will take at least two and a half months to get an auction date. This is the case in Colorado, straight from the horses mouth at the office it takes at least a week or two to process the package and then 60 additonal days until the scheduled sale. Then there is the 75 days of redemption they have to get through. At this point the property is now an REO and the real work for the bank begins. They will have to list it with a realtor and procure a buyer. So… Assume they list the property at 335k not very likely in a buyers market that they will get a full price offer so lets assume they accept 328k after negotiations but the buyer also wants 5k concessions for closing costs. Now we are down to 323k. Then they will also have to pay 6% to the realtors involved in the deal. This brings the net to the bank down to $303,620.

At 303k this doesn’t include all of the costs to take it all the way through the foreclosure process. Just to give you an idea of what I would say.

Not sure who you are talking to but if possible talk to their boss and if possible their bosses boss. You may be talking to someone who has no discretion or decision making ability.

If they think that they can get the full price from the BPO they are smoking crack, I don’t know how else to say it and I encourage you to tell them the same. In the nicest way possible of course :wink:

#1 thing to keep in mind and I have made this mistake many times. Don’t be rude, don’t argue and don’t make them mad. If you do, no matter what you say or offer they won’t want to do business with you. Try to become friends with them and if you ask them for advice and their help usually they appreciate that.

try loss mitigation to help them save there home.

do you know what type of loan is currently on the home? FHA,VA or CVL ; when you determine which type then go out to their respective website and seach “loss mitigation” or something in that wording for their standards for what % they will accept of offers.

Remember banks don’t want properties back; especially when they have to set aside 1.5 times the loan amount in cash reserves per loan… stockholders and the fed frown when they have too many…

Please see how the foreclosure auction properties are sold.
If they are picked off for a dollar over the lenders initial bid, the
lender will not care to do a SS.
Like someone else said, wish the owner good luck and walk away.
The spread is too slim from a risk standpoint.


If you are considering flipping this house, i agree the margin is to slim.
however, I would call the bank back and say this is the final and best. the lender wants to do some type of nego.
at least that is what Ocwen told me when i was working through a deal with them. I had an offer of 149K, they said, $170K, the buyers walked, when i called back, with a new contract, the guy I was working with suggested that in the future when you don’t or can’t raise the price, give it a day or two and call back and say this is the final and best offer I have.
Between this offer and the new one I have received, the lender is taking ~$500 less than first offered…
Remember the closer to the foreclosure sale date the more reasonable they are…



I am familiar with that house or at least a hundred of his neighbors.

The lenders are in lala land right now as we have a market correction in Las Vegas and other parts of the US. They don’t know what to do as prices level out or even decrease in certain areas; and a confused mind will always say no.

My suggestion would be to keep making SS offers (but not quite as high) on properties you like. If not accepted then continue tracking the property through the auction and if not bought there, see if you can pick it up as a REO cheaply. The lenders inventories are beginning to increase, so maybe they will come to their senses.


Hi everyone,

I have a home owner who wants me to buy her property— I surely will need to do a short sale.
Looking for some creative advise on an exit stategy, here is a lil history on the home.

Value checks show up at $419k to $440k
the total payoff amt. is $434k
The home owner wanted a full appraisal to get an accurate value price for their home so we did an inside & outside full appraisal today.
I will get the numbers on Friday to see exactly where we are at.
They are willing to sign the deed over for a fee and walk-but since their 3 refi’s the mortgage is $ 2,500.00 per month.
The rentals are about $1,500.00 to 2,000.00 per month. I am working with the lender one on one I have the Authorization.
The lender has not officially sent a letter of default, they are holding off in hopes of us reinstating the loan of $11k but we have no intentions on doing that only because the numbers are not there. So here in California the home owners has over a hundred days to save and decide what to do before this prop goes to sale.
Come Monday of next week I will suggest a short sale and make an offer off of the as is value and off of the ARV and of course let the lender know what the total cost will be to them if we decide to play this one out into bankcruty…
Here is my stategy let me know where and how I might re-think my thoughts.

Revert to Lender = BPO Report = $440k

My ARV estimates = $ 480k actual sale price $460k

My offer $ 333,730.33

Total lost cost on the lender = $85k to $ 90k estimate only

14 months total lost mortgage.

a. 11k 4 months arrears
b. 11k 4 months nod & nos process
c. 16k 6 months BK
d. $ 27k sales commission
e. $ 8k closing cost
f. $ 10k to 15k clean up & upgrades.

I buy at 333k,
$ 4k closing cost
upgrade 12k
carry mortgage for 3 months @ $ 1,600.00 per month = $ 4,800.00
total estimated cost $ 353.800.00

Sale price $ 460k
Sales commission $ 23k
closing cost $ 8k

Total projected profit $ $ 42,900.00

A lot of info I know but I thought that the more info the better the feedback. Please someone pick this apart and keep me in check.


Franco in San Diego, Ca.

Very nice.

WHen you try to run the numbers and come up with the short sale offer, do you basically go off what the mortgage company will lose then discount it more by 10-20k?

What is that, an outhouse in San Diego for $440k? :wink:

I don’t have any advice for you, but wish you luck. Please keep us posted.