Anyone ever buy a house under short sale?

[ColbyLang]

Looking to see if anyone has any experience in this. Potentially new house for me and the family in desirable location. Kids would have a lot of school friends very close by (unlike our current home).

Current house is 4100 sq feet as is new one. Lateral move. Difference is I can pull about 550-600k in equity out of this to make it affordable.

My question is how low is too low of an offer? I know the lender has final say so. House appears to need exterior cosmetic love, minor cosmetic upgrades plus all bathrooms renovated in most recent pics we can find from 2020.

Owner borrowed 665 for the house (public record). Hard to fathom he’s into it for more than it’s worth on regular market.

Any insight is greatly appreciated

 

[Herb Stoner]

I’d start in the low 500s - at least 20-25% less than what the bank has tied up. Maybe lower if there is anything going on with the house that would make it a tough sell. Keeping REO on their books ties up the bank’s liquidity. The banks want it gone.

Bought my first house off a bank when I was 24. I thought I was low-balling so bad I wouldn’t even see a counter offer or any consideration. The bank snapped up my offer immediately. Then they sent in a crew to paint the entire interior and make a few small repairs to make sure it me lending standards so the deal would close quickly. The house was only about 4 years old so had no problems.

 

[E. Bryant]

Is the market distressed enough that a bank will take a big loss? I know that we're headed in that direction, but it seems that banks won't capitulate until much later in the cycle.

 

[hollowoutadime]

Get a thorough inspection no matter what. It will likely influence the bank. You might get a private appraisal, if the number is helpful,reveal it.

 

[atepointer]

Looking to see if anyone has any experience in this. Potentially new house for me and the family in desirable location. Kids would have a lot of school friends very close by (unlike our current home).

Current house is 4100 sq feet as is new one. Lateral move. Difference is I can pull about 550-600k in equity out of this to make it affordable.

My question is how low is too low of an offer? I know the lender has final say so. House appears to need exterior cosmetic love, minor cosmetic upgrades plus all bathrooms renovated in most recent pics we can find from 2020.

Owner borrowed 665 for the house (public record). Hard to fathom he’s into it for more than it’s worth on regular market.

Any insight is greatly appreciated

Make sure the title is explicitly clear on ownership. During the GFC I had an opportunity to participate in a pool of short sale homes which I knew nothing about at the time. On the surface it looked like a potential home run investment. Fortunately a very knowledgeable friend in the commercial lending arm of his bank gave me the lay of the land. Deficiency judgements can still be brought against the seller and boy am I glad I passed. Those guys in that group had their money tied up for years trying to get the homes sold while prices were coming up. Hope it works out for ya not saying it can't work, but just a couple of things to be aware of even if you get to 2nd base.

 

[NoDopes]

I the banks can go after the current owner for the difference, so that could impact acceptance as well.

 

[aviumvenator]

I’ve looked at a few of these homes posted at the credit union. If they do not get their asking price they keep it and turn it into a rental that the credit union manages.