Negotiating
I am negotiating a Short Sale with Washington Mutual and Bank One.
1st Washington Mutal 155,658.02
2nd Bankone 39,986.28
Cust Filed Ch13 bankruptcy, Property released.
Comps on Property come in around 210,000.00
Bpo for Bank one came in at 172,000.00( I had to work that one)
Offered bank one 5000.00 per hud one
They countered with 15,000.00. Should I counter again and with what?
Also What should I begin my offer with Wash mutual at? Thay are sending thier Bpo guy out now. I have 3 est from contractors avg 50,000.00 in repairs.
Based upon some general rules, your goal should be to buy the property at 70% of market value, less repairs.
Meaning this--$210k X .7 = 147k - 50k = purchase price of $97
It is always a goal to influence the BPO but frankly 172k is not low enough. If the value is 210k and the property needs 50k repairs, you needed the bpo in at 160k (without working it!)
All is not lost--the 1st mortgage company hasn't been out so you can try to get that BPO where you want it.
In my limted experience doing short sales, it always seems like the 2nd mortgage companies want their payoff to be the difference between the 1st mortgage payoff and the BPO. Always..it is like clockwork. At least for me. If you're BPO is low that may be fine but you can do better.
Quite frankly I don't see any money on this one. I do really think that you've got to influence that BPO to make money on short sales. If not and you're buying at 80% of FMV, there simply is no profit.
GOOD LUCK
Let BankOne know that they will probably be wiped out completely in the foreclosure sale, and that you will do your best to work something out to get them something, but, you need to know what the lowest amount they can accept is. This is a way to kick it back into their court without making a counter. After they respond, let them sit a couple days without a response. The other thing you can mention to BankOne is that they might get 15K if the BPO is correct, but the broker doing the BPO is also trying to earn their business. What happens if it goes to sale, and only brings 160K? They then end up with just over 4K less costs. Even if it brings 170K, that is still less than the 15K they offered. Are they willing to gamble like that?
With regard to 1st Washington Mutual, you need to get some good high and valid repair estimates and pictures that show how badly the property needs major repairs. Make sure your contractors are giving you repair estimates that will get you that high comp of 210 or better. Your initial offer should be somewhere around $62,263. Your maximum allowable offer is $97,000. This gives you room to negotiate. You can expect to settle somewhere between 78K and $93K.[ Edited by bnorton on Date 09/22/2004 ]
1) is the 50k repair estimate legit or inflated to help get you a good price
2) what do you think the as-is value is of the property.
Is the 15k from bankone to release the lein only of for satisfaction in full of the debt (release owner from any future judgement from the deficiency)?
You can tell Bankone that the first made it a condition of their SS that the second could not receive more than 5k. With 155+
You can wait until the BPO is done to offer WaMu. Are you good at working with the BPO person to tell you about what it will come in at? If you knew the BPO you could better formulate your offer.