What to offer the bank on a short sale?

While the concept of a real estate short sale may be simple to grasp for some real estate investors, many are asking 'what to offer the bank on a short sale?'. What to offer the bank on a short sale depends largely on the real estate market where the house is. Different rules of thumb work in different real estate markets.

Simple rule of thumb on what to offer the bank on a short sale

The obvious answer to the question 'what to offer the bank on a short sale?' is as low as possible. But how low can you make an offer to the bank on a short sale? This also depends on the real estate market and the particular bank's threshold.

What happens if I don't offer the bank high enough on a short sale?

If your offer is too low, the bank will laugh and reject your offer. So, let's be realistic when making an offer to the bank on a short sale. Your goal in a real estate short sale is to buy the home for as little as 50% of the value. So, as a rule of thumb, you may want to start by offering the bank 40 cents on a dollar.

What you offer to the bank on a short sale also depends on how much repair there is to the house. If the house is in perfect condition, maybe you can offer more to the bank on a short sale. However, you don't want to offer too high and want to leave some room for negotiation.

Offer low on a short sale

The key to a successful short sale is to offer low on your first short sale offer. If your mortgage short sale offer is too high, the bank will just accept it and you will feel like you have been jipped. So, offer something lower than 50% of the market value to start your short sale process with.