Buying a destroyed shortsale

[James Roux]

Good morning everyone I’ve been looking to buy my first property and it’s a destroyed shortsale house. Needs major repairs stucco all over the outside needs multiple areas repaired plus repair the whole house a roof , all interior walls gutted and replaced floors gutted and replaced house was not maintained at all. home value estimate is 50-60k it’s on a shortsale for 25k I feel like the bank is asking too much for the property what are the odds I could offer and get it accepted for 5-10k!”? Anyone with experience with shortsale a would be appreciated thanks.

[Kevin Sobilo]

@James Roux, I have dealt with short sales as an agent and my experience is that the lender does not set the asking price.

When I list a short sale, I find out what the buyer owed on the property and then figures out with closing costs what the buyer would need to sell for to break even. We initially list for that price and then immediately contact the lender about doing a short sale.

Generally, the lender will not even approve price reductions. You are lucky if they give any input at all into pricing. The contract the agent deals with at the lender isn't a decision maker and also the seller will receive no proceeds, so the lender does not see the seller as being on their side.

If you make an offer, the lender may have another real estate broker go through the house and give a BPO (broker's price opinion) to help them decide how to negotiate with you and what is a fair sale price.

So, I do think that its possible you could negotiate a much lower price than the asking because the lender may not have had input into the price and might get an independent opinion before responding to your offer.