Post # 1
My SO and I have been looking at houses for about 3 months now and we found a house that we like a lot but it is a short sale. Now we can afford to place an offer on the house that is just shy of asking but the real questions is have you ever heard of an offer on a short sale being accepted with sellers assistance? Right now we are thinking that we will be about $3k short on closing costs and while I know we can get help from our parents to help cover that $3k…we would rather not have to go that route if we can avoid it. Any thoughts/ideas/advice??
Post # 3
- Wedding: August 2013 - The Liberty House
If it’s a short sale, you should be able to make an offer that is way lower than asking and negotiate from there because the seller should really want to sell.
Post # 4
The bank holding the mortgage must approve a short sale in most states, because it’s going to be them taking the hit on the difference between the balance on the mortgage note and the selling price. Chances are, if the seller is willing to offer assistance, the bank will reject it or renegotiate the price. After all, if I’m the bank and you’re the short-selling seller, I am already losing money on you; when I find out you’ve got $3k to give to a third party, I’m going to demand you give it to me instead. You also don’t find a lot of flexibility on the asking price, because the bank doesn’t want to lose even more money on the deal.
Also, contrary to popular opinion, a short sale is a very long process. It’s not fast at all. So if you’re in a hurry to buy, a short sale might not be for you.
I’d recommend you work with a realtor that specializes in distressed sales, as it is a very different process than a normal home purchase.
Post # 5
The seller will probably accept anything if they have no other offers. The problem is, what the seller agrees to has no bearing on what you will pay. Let’s say the house is listed at $350k and you offer $340k with $3k seller’s subsidy. The seller agrees, you’re under contract. It will now be an average of 90-120 days before the bank that gave the seller their loan gets back to you. They can come back to you and say, $380k.. or they can accept your offer. The bank will demand at least fair market price for the house. If the bank knows that the house is worth $350k, they’re not going to give it to you for anything less. And that’s even if they approve the short sale. They may decide that it is actually too much loss and foreclose on the house. Now, if they get to negotiations and they agree to your price and the appraisal comes in less than that, the bank will usually re-negotiate down to the appraisal (again, if they decide to approve the short sale).
So, the tl;dr version: Ask for the price you want. Instead of doing $240k+ $3k seller’s subsidy, ask for $337k. If you are willing to wait 3-9 months for the house, okay with losing it, and know the fair-market price for the neighborhood (cma’s, cma’s, cma’s), then go for it!
Post # 6
- Wedding: October 2011 - Bed & Breakfast
In this area, asking for closing cost assistance is a sure way to kill a short sale deal. And yeah, be prepared to pay over asking price. The bank decides the actual selling price, not the seller. We are 6 weeks into our short sale and still waiting for the bank to respond. It is definitely not a short process.