How low is too low to bid on a house with the housing market being the way it is?

Question

I am in the market to buy a home. I found one I'm interested in but my realtor has mentioned that the house was a short sale. How low is to low to bid on a house that's considered a short sale?

Answer 1

I have been a Realtor for thirty years.  I am not bothered by "low offers".  That buyer is saying they want my house but they are trying to see if they can get it cheaper.

I am bothered by useless offers.  I have gotten some "offers" that lets the buyer easily get out of the house after they look at it (because they have not even seen it yet).  Some people wish they could buy your house but they have a house that apparently can't be sold.  Other people can not get a loan.  Others are never going to buy, they simply try and negotiate a real good offer and then try and sell their position in the contract.

On a short sale the "seller" has no money to make repairs or anything, and the bank will refuse to do so.  Whatever length of time is normal for closing in your area- a short sale will take much longer- at least twice.  

Have your Realtor fully explain short sales to you and how it might be good or bad for you in your situation.

Answer 2

In theory there's no such thing as "too low of a bid." You can bid $1 on a million dollar house, but will they even look at such a bid?

In a short sale situation the lender already agreed to take less than the current owner owes them, so they'll not go much lower than they are asking.

Have your Realtor find out how much the owner owes right now (it should take a Realtor 3 minutes to get this info.) This will give you an idea on what your bid should be, but in general, if you really want this house, bid close to the asking price.

Answer 3

it  depend on the pay off.  a short sale is so the owners can sell and not have a foreclosure on their record. if there is a lot of bids then you will have to bid the higher.  with out more info there really no way of giving you a good answer to this. if you are working with a  realtor  then he/she can help you more then we can.  good luck and i hope you get it.

Answer 4

Bid at the appraisal price or within $10K of it.

Answer 5

I guess there really isn't such a thing as too low. The worst case scenario is that you get a "no" for an answer and a counter bid. The mortgage company will be looking to cover their loan amount if at all possible, but not necessarily. I wouldn't worry too much about insulting someone. After all, this is a business negotiation, not a cocktail party.

Answer 6

I'm not certain where you got the information that the house is worth $350,000.  However, if you are correct with that valuation, there is no way the lender is going to agree to a short sale for $245,000.  There would be no reason for them to agree to take such a financial pounding if the house is worth one hundred thousand more than that.