Dec
18
Short Sale Buyer in the San Fernando Valley?
By
Mike S asked:
I am interested in a property in the Studio City / Toluca Lake area. It is a townhome that is listed at $419k short sale, and the Zillow.com’s “zestimate” is at $410k.
I am interested in a property in the Studio City / Toluca Lake area. It is a townhome that is listed at $419k short sale, and the Zillow.com’s “zestimate” is at $410k.
The home has been listed for 93 days, and was last sold for 475k in 2005.
I am considering a sizable down payment around from 150k, have excellent credit, and plan on a 15 year mortgage.
I have zero experience in short sales, and my real estate agent doesn’t seem to have a lot of experience in the area either, so I would like to know what a good starting offer for this home would be. I don’t want to be held hostage by the bank using me to attract other offers, and I am looking at a few other homes in the $375-400K range.
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3 Comments
December 20th, 2009 at 1:23 am
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Do you have a lot of time on your hands? Short sales are notorious for being drug out for months. Also, you really should get an agent who is well versed in these sales. You are behind the 8 ball already with both of you going in blindly. I wouldn’t even offer 410k for it to tell you the truth. I bet it is worth closer to 350k or less…
December 23rd, 2009 at 5:29 am
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First fire that agent. You need one that knows what the hell they are doing or you are wasting your time.
Zillow has nothing to do with real life, ignore it.
When you get yourself a real agent (not the turkey you have now) have then to a BPO. The bank will only accept an offer within 10% of the BPO. It does not matter what is owed, what it sold for, etc. All that really matters is the present value.
Keep in mind that the bank has not agreed to 95% of the short sales listed, and the process takes about 3 months. If you have a good broker you will at least get an answer. They are likely to ignore a less then good agent though, they do not even bother to reject your offer.
December 24th, 2009 at 6:20 am
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Mike, lack of experience in these transactions, (your realtors) can cost you a great deal of money. My best advise is to offer as close to asking. In most cases these are priced well below the mortgage and/or tax values. Your Realtor should have already investigated this information and given it to you. It’s public record.
As for information on Zillow, don’t take that as gospel. Most of it is old information, it lumps all styles together and anyone can put information about their house on there and it accepts it.
You should have your Realtor run a comparison in the neighborhood you found this property in, to see what the true values are now and take a look at 1 -2 years back. It will only give you good perspective for what is happening in the area. If values are still declining, you might want to hold off on that large down payment. And start out much lower, so that you don’t lose that equity. You can always pay down your mortgage later.
Also keep in mind with short sales, any offer needs to be approved by the lender. Some don’t have your haste in completing the transaction and on top of that it’s the holidays. So expect a delay in an answer for several weeks, if not a couple of months.