Short sale bank counter offered is this counter crazy!??

Foreclosures, Short Sales, Tax Foreclosures
1

I was in negotiation with the bank for a shortsale on a home. It is 4.5 hours from Phoenix in a small town and the market there is slow. The house was built in 93 an only needed paint carpet and cleaning. The owner owed 213k total with fees. The house ARV is 170k. I offered 118400. They make a bunch of mistakes and to make a long story short it took them 2 months to get their BPO done, and a correct submission to the manager. The called me yesterday (The trustee sale was today) and asked me If I could net the bank 158k. 158k? Why would anyone offer .93 cents on the dollar on a home in foreclosure? Thats no deal at all. Did the bank really think they will get that much at the sale? I based my offer on (90% of comps of 170k= 153k. Then I subtract 5k for repairs, and took 80% of that value, and got 118400 (which is about 70 cents on the dollar)).

Can anyone help me undrstand why the bank would not deal with anyone offering less than 93 cents of ARV? Is it because he owed so much more than the house was worth?
Dan

2

Some banks haven’t accepted the reality of the market yet. When the market was booming, they were able to get prices like that for REO’s.

3

I think you offered too much. I always start my offers out at 60% minus repairs. In this case, 97k is what I would have offered. You have to keep in mind that the banks like to negotiate so if you start low and come up they feel like they are winning. haha The joke is on them. :banana Now that you are already above 70% you have very little room to move up so it SEEMS that you are not willing to work with the bank. Remember, you can ALWAYS come up in price but NEVER go down. Just my thoughts. Good Luck. I hope it all works out.

4

The Bpo is what they base their counter off of. It’s probably Fannie or Freddie or has PMI they will accept 92% easy. The banks start there. Your only option is to get the BPO down by comps, or repairs. If you can’t then you will never get them down and you should just move on.