For those that read my blog, I have been so busy with People’s Short Sales, I have failed in being consistent with my writing. However, as I have mentioned before I am going to post the misconceptions of short sales. The on today is THE LENDER WILL NOT ACCEPT AN OFFER BELOW FAIR MARKET VALUE, This is a common misconception that if the fair market value of a property is $400,000 and the owner owes $500,000 the bank will not accept anything less than $400,000.
This is simply not true. The lenders often accept offer as low as 15% or more below current market value. It is all about framing the offer to look like it is the lender’s best interest, and that it would make the most sense for them to accept it rather than the alternative. Putting together a solid offer and submission of the hardship is the key to the bank decision.
From the lenders view if they do not accept the below-market -value offer, the alternative is for them to let the property go to foreclosure and then to sell it as one of their Bank Owned Properties (REO). However, if they do accept your offer, they avoid altogether the costly foreclosure sale and recuperate precuperate from their investment right away. They also do not have to risk something happening to the property, or a more sever real estate market. Furthermore, the possibility that they would not be able to sell the property for months and months on ends. Used to your advantage, these can make for some very convincing arguments for the bank as to why they should accept your offer. Lenders will often find that it makes good sense to accept a short sale at below fair market value even as much as 15% below in compelling cases.
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