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HI..I had a question about what to offer on a short sale here in Missouri. I have the paperwork all ready to go on a house that sold for $143,000 two years ago. The guy just cannot make the high payments any longer.

It is a nice house, good neighborhood...needs a little paint, etc. but not too much.

The market here is pretty slow and things are going for less than they were, plus there are a million homes on the market!

I did a short sale in the past on a home nearby. The family owed $140K, I paid $100K but still feel like I paid too much.
Plus, it is a working-class area and I do not think I c ould buy it and rent it for more than $800 or so...

Anybody have a "formula" or good idea of how to base your offers now that the market is sluggish? I would love th have the house..it is a great property but only at a good price...
THANKS!

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amy Mcdonald

Amy

Congradulations on your short sale, the $40K discount is allmost 30%. Now as an answer to the second house go ahead with the short sale and as soon as you get a figure in writing from the lender on what they'll accept then run a round robin auction. The only paper work youi need to begin with is a option to purchase between you and the seller (be sure you disclose that the deal is based on the bank working with you) and a authorization to release information contract.

John

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John Thurman

Well Amy,

Hmm... I think the only way to figure out a good number to submit to the lenders is to figure out the following:

1. What are the COMPS for the area. (You mentioned houses prices falling.) You want to know what the average sales, and what low comps to show.

2. What is the average TOM (Time on Market) for the area.

3. What is the interest that the lender is loosing/month. Now multiply that by the number of months the lender will need to hold it (due to redemption periods, FC process, and TOM.)

4. Estimate what the lenders have to hold in reserve for the non-performing asset. Then figure what interest is lost with that amount. (multiply the same as above)

5. What repairs are needed.

6. What do you want to make on the deal, to make it worth your time. Also, what is the least amount?

Now take the average comps and subtract the rest. That will give you a number of what the lender expects. Now do the same with the low comps.

That should give you a range from what you want to make to what you need to make. Offer the figure of the LOW comps and the want to make (in step in #6.) Just remember that the number can not be higher than the average comps and the need to make (in step #6.)

Does that make sense?

Later,

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Michael Suess
Synergy Properties, LLC