When is an Offer on a Short Sale Too Low?
A short sale is not a bargain by default. Sometimes a lender will accept an amount below the Broker Price Opinion which could equal savings over the long term, in a market that’s increasing in value, obviously. If the market prices are still on the decline (more supply than demand), then buying a bargain below market value only assures you’ll be above board for a short time.
So, when it comes to offers on homes, the offer is too low when the bank says no, and on a regular sale, the offer is too low when the seller says no. In a short sale, since the parties to the transaction are still just the buyer and the seller, technically, the seller is the one who says no, but that’s based on common sense. Nobody who knows what they’re doing in the short sale arena is going to recommend that a seller sign a low-ball offer. Until the listing agent has navigated the bank’s personnel to acquire an approval for the seller, there’s really no way to know when the offer is going to be too low. If the seller signs a low-ball offer, it could tie up that property for a few months, which is not what you want to do when your seller is facing foreclosure.