Getting lowballs accepted, is it possible?

[Bienes Raices]

Has anyone been successful at doing this with the short sales listed on MLS, or does the bank always just wait to put it to auction in hopes of getting more $$$? There are houses in my area that have been literally been sitting on market for a year as a short sale, and some of them extremely messed up.

[Scott Hubbard]

Originally posted by Bienes Raices:

By lowball I mean 20 - 30% below list for something that's in bad shape.

Lowball is a term used by agents and sellers to express their disdain with a lower than expected offer. The fact your initial offer is much lower than market is not relevant becuase it is simply a placeholder until market valuation can be determined.

As Maryann has already said, the average margin is between 0% and 20% of BPO/Appraisal value and if you offering on properties already listed on the MLS, then your margins will be much closer to 0% than 20%.

In a short sale, your trying to defray expenses on the A to B transaction in order to create margin and capitalize on the expected foreclosure costs the lender will incur. Techincally, your short sale offer should NET the lender more versus an auction or REO scenario. So anytime your offering on MLS properties, your not saving the lender commissions on the A to B and will lose that discount automatically.

Personally, I do not offer on already listed properties unless there are some other costs I can take advantage of like major repairs, mold, or structural issues. If your making "lowball" offers on listed properties which are turnkey, the chances are your margins will not be enough most of the time.