The list price is 300K on a short sale but public records show the house was sold for less, can I bid lower?

Question

Hello!

I've been monitoring a house that has become a short sale in the past several weeks. It's listed at 299,000 but when I looked up public records for how much the house sold for to the current owner, it sold for 183,000 about 9 years ago. Also a house with the same sq. footage & number of bed and bathrooms right down the same street just sold for 225,000 back in March.

Do I have good odds of getting the house on a much lower bid?

What is the process for finding out exactly how much is owed on the home?

And lastly,

Does the fact that the home sold for so much less necessarily imply that they owe less than that much? I don't know how second mortgages work, etc. etc.

THANKS!!!!!

Answer 1

Chances are, at the height of the market they refinanced with cash out - so therefore they owe more than the house is worth.  With a short sale, your best bet is to offer current market value.  You can check even on the MLS site for recent sales in the area.

Good luck to you.

Answer 2

You could always make the offer. Depending on how many other offers that have been received, it may get ignored or more likely a counter offer will be made.

You almost have to ignore how much the house was originally sold for since the market is different than it was then.

I would go with what the other house sold for when making the offer. Why is the house you want worth almost 30% more? Talk to the seller/Agent and see what you can negotiate.

Answer 3

You can bid anything you want, period.  However, to be quite honest, the chances of being able to close on a short sale are slim to begin with (only 1 in 20 listed actually gets sold), so take a short sale and drop the price to much and its so rare that this will close that its almost not worth your time.  Still, to answer your question, you can bid anything you want - if they don't like it they can just say no.

Answer 4

If it's a short sale, they owe more than the house is worth - that's the definition of "short sale".

Public records only say what the house last sold for. You need to contact a real estate agent, who has access to the MLS and tax history listings. What probably happened is the owner refinanced or cashed out with a second mortgage at the top of the market in 2005 or 2006. Remember, it's what's owed on the house, not what it last sold for.

I just picked up a short sale townhome in San Diego for $200K. The owner bought it in 2002 for $183K, but cashed out on a refinance in 2005 for $375K (the value at the time).

Answer 5

You can offer any amount you want.  They can accept or decline it.  The previous owner could have gotten a 2nd or just refinanced the 1st with enough cash out that they owe a lot more than they paid for it.

You can look at the county's website for history of the sales prices.  You would be able to search public records for all liens against the property if you knew how, but that wouldn't tell you how much is owed today.  

Your odds of getting the house for a lesser amount will depend how how much they want to sell it.