We purchased a property couple of years ago on the top of the market… we were working on the plans to develop it. Unfortunately the economy took a turn for the worst and we had to scrap the plans.
At this point it is listed as a short sale and we received few offers. There is quiet a bit of a difference between the offers… one is for $700k, one for $780k and the last for $850k.
I am thinking that it might be better to present a lower offer to the lender first as far as negotiations are concerned and then when they counter we’ll have leverage with the higher offer.
Or is it better to go in with the best offer right away… What is your opinion?
I always go in lower than I am willing to pay on a short sale because I want to have room to come up. The bank expects to negotiate. The main thing is you need to trigger an interior BPO and than worry about price.
The other answer used to be true. However, remember that your servicing lender is likely not the entity who will approve the short sale.
Most secondary market investors, who are usually the ones who own the mortgage note, are moving from the comparison analysis between REO value and short sale value, and are now using the minimum threshold analysis. This allows for very little actual negotiation, although not always the case. You are best served by presenting all of the offers as part of the proposal. If Fannie Mae is the SMI who owns the note, their minimum threshold is 88% if sold within 30 days, 86% if sold between 30-60 days, and 84% if sold later than 60 days.
I have heard this time and time again… " I dont think the bank will take that" :bs…
EVERYONE STOP, JUST STOP… if anyone has said this do yourself a favour and never think it, or say it again :evil.
who care what the bank will take or not take :banghead, submitt the offer’s with a hardship letter, documented facts on how much the market has gone done. show them everything bad with the property and get a internal BPO ordered. Meet them there too and give them a market comps, crime reports, repair orders, and anything that is crappy :flush with the property.
If they say no, try again. If they say no again try again!!! :argue Keep trying untill you are kicked out or removed or have no legal right to the propery, Never give up…
And this is the BIG secret :deal… keep trying till you hear yes or the bank takes it.
Its realy that simple! :shocked
This is 100% not owned by a secondary market since this loan was a non-conforming loan meaning it did not fit the requirements set forth by the GSE’s.
My advice is to only submit the highest offer. Submitting multiple offers is poor advice since lenders do not care to sift through multple contracts. Instead the wish only to evaluate the highest offer in terms of net proceeds. Your goal is to begin negotiations using an offer and presenting a lower offer could end up getting your short sale overlooked if it does not net the bank enough.