Q: Question: Home priced at short sale of $330,000 and advertised as bank approved at price. Neighbors comparable home sold in July 2011 for $330,00 with better yard/view and partially finished basement. I offered $310,000 in August with no contingencies on buyers side. In October bank countered with $340,000. REAL Forecast suggests property values in my area are decreasing over the next three months between 4-9%. What should I counter at and is this bank (BofA) dealing with me in good faith?
?Anonymous, Chicago, IL
A: The banks are always dealing first in their favor. But note that the bank cannot sell a short sale for more than the Brokers Price Opinion. A BPO is like an appraisal however it the opinion of the value of the property from local realtors/brokers. Normally banks will order 3 to 4 before deciding on a firm price. If the agent said the bank approved the price it is more than likely true. The agent wants to get the house sold and lying would only delay his/her goal- settlement.
It would be good for you to have your agent do a CMA of the market place to tell you if in fact home prices have creeped up slightly, market forecast can be broad spectrum you need to zero in on that neighborhood in which you are buying.
Note that the bank does not consider views, unless it is water or a golf course. Does the partially finished basement have a bathroom, bedroom, theater room etc?. if not the value probably will not change much between your property and the comparable. Best wishes?
Natalie Dean is a Realtor? with MRE Properties in Annapolis, MD.
A: The bank is dealing in good faith. Counter offer what you believe to be fair based on your local market.
This is typical in short sales because the lender is basing their price on Broker Price Opinions (BPO) done by mostly incompetent and in-experienced real estate agents. BPO?s pay about $35-$55 for about 5 hours of work, not including gas and travel expense. It equals about $8-$10/hour to complete one accurately. At this rate, not much effort is put into the quality of the derived home value.
This is why a quality short sale listing agent is a must! This agent is the liaison to the lender and the one who should be pressing the lender to lower the price based on the evidence that agent would provide. The listing agent should be working proactively to convince the lender that the BPO values are incorrect and give them proof as to why it should be lower.
BofA is notoriously difficult to work with, although they are trying to make improvements, so counter offer at a price that makes sense to you and be willing to walk away if they cannot meet your price. Good luck??.by the way, make sure your agent thoroughly reviews the next listing agent in a short sale. If the listing agent is in-experienced, realize that it might make the transaction more difficult. If your agent is experienced in short sales, he/she should know what questions to ask of the listing agent.
Adam Aguilar is a Realtor? with Reliantra in West Toluca Lake, CA.
A: I am puzzled about the $340K counter from the bank, if the property was advertised as approved short sale price for $330K then there will be a lot of questions about the counter offer of $340K regardless what was sold in the neighborhood or Real property forecast. Your offer price of $310K could be countered by the Bank no more than $330K, you can still negotiate it with them, but the short sale process will be longer that you probably want it to be.I suggest that you choose a Realtor who is very strong in negotiating this type of transactions with lenders/Banks.
Rena Kovach is a Realtor? with Fairfax Realty in Vienna, VA.
A: The banks have a number that they are looking to get for the property and sometimes will hold out till they get it or if enough time has gone by they will re-think that number.
Ninfa Valella is a Realtor? with Coldwell Banker Residential Brokerage in Wilton, CT.
A: The bank bases their offers solely on the appraised value their appraisers supply them with. This has happened to me before as well. Unfortunatley, the only thing you can do is offer your best and final. However, whatever you do, do NOT pay more than you believe it to be worth.
Maria Picardi-Kenyon is a Realtor? with Re/Max Tri County Realtors in Hamilton, NJ
A: Ask your Realtor to pull recent comparable sales and if he or she can find out what the bank?s BPO value was from the listing agent. BPO stands for Broker?s Price Opinion ? its kind of like an informal appraisal. The bank sends out their own Realtor to perform this but sometimes the Seller can ask that the BPO value be disputed if its way off. Generally most lenders are wanting to net about 95% or better of the BPO value. Hope this helps.
Liane Jamason is a Realtor? with Keller Williams Realty in Tampa, FL.
A: You can?t necessarily win with the bank on what the economic forecast is unless it does actually drop in your area 4-9% in the next 3 months. If that?s the case, just wait until it does to buy it. You also may not know exactly what happened in the neighbors sale. What if that was some kind of a distressed sale that sold below market value? Perhaps the bank has other offers in hand and they are negotiating in good faith and are giving you the chance to competitively bid on the house. Of course if it?s not a deal you can live with call their bluff and give them your original offer and terms as a counter.
Jim Mellen is a Realtor? with Re/Max Peninsula in Williamsburg, VA.
A: When the Bank?s counter of a short sale is out of whack with the real market value, it is not that the Bank is not dealing in good faith. Their counter is based on the valuation report they received from a local agent who provides such services. Valuations are an art, not a science, so there can be deviations.
If you still feel you want to pay $ 310,000 for the house, counter at 310,000. If there are no other offers competing with you, you may get it this time. It also helps if the listing agent asks for a REVIEW OF VALUATION REPORT and submits a market analysis supporting your price. It takes extra time but may work, depending on who the investor of the loan is. The Bank is just servicing the loan. They are not the decision-makers.
Sylvia Jonathan is a Realtor? at Coldwell Banker Platinum Properties in Irvine, CA
A: You?re in a great position to negotiate since you have no contingencies. The bank wants $340,000 and you offered $310,000. Split the difference with the bank, offer $325,000. It sounds like this is a desirable area/house, another buyer can come in at anytime and offer more than your original offer and chances are, BofA will take it.
Maria Jeantet is a Realtor? with Coldwell Banker C & C Properties in Redding, CA
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Source: http://rock-n-rollrealestateagent.com/what-should-i-counter-offer-on-a-short-sale-property/
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