My first short sale

Hi everyone! I just need some advise on the short sale that I made an offer on.

Seller bought this property for $525k 100% financing, last year, now they’re selling it for $420k “AS IS” w/ the help of an agent of course, it’s about 3 yrs. old. Unfortunately, the owner never took care of it, needs a lot of paint job, water damaged in the kitchen wall (possibly mold forming) ???.
To make my story short. I went ahead and accepted the sales price of $420k, and I indicated that I would like to keep the loan with the current bank, but would negotiate a rate of 2% fixed for 30 yrs. (sounds ridiculous)?
Anyhow, it’s been over 1 mnth, since I made my offer. My agent had contacted the selling agent last week, and she states that she hasn’t heard from the bank and they’re are 3 other offers that they’re reviewing. I, myself contacted the bank as well, but, they refuse to give me any information at all on the status and that I had to contact the agent and ask.
I really don’t know how long I have to wait. But, I don’t know if it was a good move for me to make an offer on this property. I pulled comps and found out a few mnths ago same exact property sold for $459k, not much of a difference there. Pls. help me? How can I expedite the process of this if possible? Or was this a good offer? I would appreciate any response. Thank you.

I am not sure if I fully understand your scenario, but i will give it a shot. I will just say, though, that it wouldn’t be a deal I would touch - profits are way to thin. Here are some random thoughts…

  • I never offer asking price (but that is geographic and market-dependent, I suppose)
  • damage/repairs sound relatively minor
  • mold is made out to be public-enemy-#1 but 95% of the time, a gallon of Clorox and some good ole tap water will take care of it
  • I’ve never seen or heard of an offer like yours… take over existing loan at 2%. Yes, ridiculous. Not sure how the bank would do that, even if they wanted to.
  • what is your exit strategy and your goal on this transaction? If ARV comps are $459k, there’s no margin
  • you said the exact property sold a few months ago for $459k… I will assume that property was in better condition. You account for the fix up costs and condition, you are probably upside down on this property on the day you close.
  • if available, use distressed comps, not retail comps.

If your numbers are right, I’d be looking for a better deal.

Thank you that helps a lot.

well the good things is there should be NO WAY your offer is still binding if submitted a month ago. If you are uregretting the offer, then walk away. if you are still committed to your offer, fire your agent.

My agent is actually a good friend of mine. I think I’m going to walk away from the deal. The more I think about it I don’t think I’ll be even to get positive cash flow on this property even If I were to rent it. If my mrtgage pymnt is $1600, It would be even hard for me to rent it out for $1700, also w/ the seller stating they’re selling for AS IS…I still have to come out of my own pocket to do some paint job and figure out that possible “mold forming” in the kitchen. sigh. Well, I guess I need to move on and find a better deal. Anyone has one for me?