I want to talk about how short sales work and the steps that banks take to come to price that they will take for a certain listing. Many buyers out there think that they can make any offer that they want to and the bank just may take it. Here is how most banks handle offers once they are presented.
Once an offer is in the hands of a bank they order some one to go out and give them a fair market value on a property. Sometimes they will have a local agent go out and do what is called a BPO (Broker Price Opinion) and other times they may send out an appraiser. What they are looking for are recent sales in the area of subject properties. Most banks want to have 3 SOLD properties within a 2-5 mile radius - the closer the better. They want the comps to be close to the same age, size and in a similar area. Most of the time this can easily be done. The banks are going to also look at what is currently on the market. They will also want to look at the 3 best ACTIVE comps that are on the market. This will allow the banks to see what they are going up against.
Once the bank receives this information, they can make their decision on what they will accept. The goal of the bank is to limit their loss as much as possible. Most of the time as a listing agent I can about tell you the price in which the bank will take. Understanding this part of the Short Sale process will make the whole transaction less stressful. Many buyers just think because they are headed to Foreclosure the bank will take any offer - that is just not the case.
The banks have made improvements of the short sale process over the years. With the improvements that have been made, the process still will take a few months. Buyers need to be very clear about the process of a short sale. Many buyers choose not to look at Short Sales due to the long process. The number of investors that are purchasing Short Sales are on the rise. The reason for this is that they are able to wait for the banks decision.
BlueCoast agent Kirby Keene - 336-399-2065