Is there a magic number for short sale discount?
Property will appraise at $160K. Seller purchased two years ago with FHA first time buyer 97% financing then added his closing costs to the loan resulting in something like 103% financing.
Seller has lost his job and has moved out, renting a smaller apartment. He can not afford to carry the mortgage note and his apartment rent. The unverified story is that he may be one month in arrears now.
My question is weather there is some minimum percentage that the mortgagee is likely to accept. I might consider offering $130K, which would be slightly better than 80% of the appraised value.
The seller is desparate, and is willing to let the property go to foreclosure if someone does not rescue him. Property is a 3/2 SFR and is the median priced property for this neighborhood.
I've heard that you always offer less than what you would consider paying. You could always negotiate up when they counteroffer, but you can't negotiate down.
You could offer say $100K. If they reject the offer, then submit another offer of $110K. It all depends on what the most you are willing to pay is. I've heard some investors who will only buy a property if it is at least 30% below market value. That is the criteria they set for themselves. If they don't get it, then they go to the foreclosure auction and see if they can get it for at least 30% below. If still no, then they move on to the next. It all depends on what you set as the most you are willing to pay for a property.
Tanya[ Edited by tanya1215 on Date 03/30/2003 ]
Dave, if you offer anything less than $130,000, you'll be wasting your time, the lender's time, and the Homeowner's time.
Who will get hurt? The Homeowner. It's in the Homeowner's best interest to either cure the default and preserve his/her credit, sell the property quickly, or devise another type of transaction that will accomplish their objective. If the Homeowner enters into an ill-fated transaction that could consume a month or two... that just makes matters worse.
From what you have described, this situation doesn't lend itself to a short sale. Consider another technique.
TheShortSalePro,
Just curious on your thoughts of why the above example doesn't lend itself to be a short sale candidate? In your opinion, and from the information provided, what disqualifies this property?
BAMZ