How much should I bid on a Short Sale Home?

Question

I want to bid on a short sale home in West Sacramento, CA. The listing price is $200K. My sister is the president of the HOA and said the county assessor just re-appraised the houses in the community at $225K for tax adjustments. The house was originally sold for $361K two years ago...so I'm assuming a lot more is owed on the house than the asking price. The house is 2 years old, has about $30k worth of updates and is in excellent condition. Also, there are two other houses in the community on short sale for the same price. What would you think would be a good offer. I really like the house...and am thinking of offering a little more than the asking price.

Answer 1

Typically short sale homes don't go for much, if any, less than the asking price.  See if you can find out if there are other bids on the property.  If not, and if you think 200k is a good price for it, try bidding the asking price.  If there are bids on it you may want to go a bit higher, but don't get too attached and end up offering more than you think it's worth.  Short sales can be a great way to get a good deal but aren't necessarily so, and lenders can sometimes be very stubborn as to what they'll accept (understandably so, as they usually lose a bit of money from the deal).  Bidding just about the asking price is probably a good idea provided you're comfy with that and think it's a good price for the property.

Answer 2

Your best bet with a short sale is to offer full list price if you really want the house.  The price that it's listed at is probably what the bank appraised it for, and they are not usually willing to take much, if any, less.  You could offer more if there are a lot of people competing for the house, but if no one else has offered on it then that isn't necessary.  Besides, the bank can't sell it for more than the appraised value.