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Can Bank Counter-Offer for More Than is Owed when Doing a Short Sale

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  • 12-10-2014, 11:44 PM
    rangergts
    Can Bank Counter-Offer for More Than is Owed when Doing a Short Sale
    My question involves real estate located in the State of: Washington

    So we have an offer in on a short sale. The property after several price reductions was listed for $524,995. We made a cash offer for $525,000. Looking on the county information the principal balance on the first note is $535,000 and the 2nd wasn't scanned in online. We heard the payoff for both loans back in July was in the $580,000 range. The first had their "appraisal" done, not sure if it's an actual appraisal or just a BPO as I have no idea how a reputable appraiser could be so off, and they send a counter of $690,000. This is $100,000 OVER what the bank is owed! It wouldn't be a short at that point. I don't see how they can even make that call. Can they legally make a counter that's more than what they're owed? It seems to me anything over what the full payoff is would be a decision of the sellers not the bank.
  • 12-11-2014, 12:13 AM
    Disagreeable
    Re: Can Bank Counter for More Than Owed when Doing a Short Sale
    Each purchase is a negotiation. You can counter offer at the same or a higher price or walk away.
  • 12-11-2014, 05:36 AM
    flyingron
    Re: Can Bank Counter for More Than Owed when Doing a Short Sale
    You have no idea what the bank is owed. The only thing that matters is

    1. How much is the property wroth.
    2. How much it is worth to you.

    Your offer wasn't accepted. They can legally offer whatever they like. You don't have to accept there's. Feel free to offer a different amount if you wish or walk.

    If the offer is for as much as the outstanding debt secured by the property, it ceases to be a short sale anyhow. The current owner doesn't need the bank's approval.
  • 12-12-2014, 12:29 AM
    rangergts
    Re: Can Bank Counter-Offer for More Than is Owed when Doing a Short Sale
    Thanks for the obvious options and not answering my question. I know we can accept or walk away or make another offer. The market clearly shows the property isn't worth $550,000 because it was listed for that and got no offers. And I do have an idea what's owed as I can see what the original note was and my realtor was told earlier on what was owed.

    Clearly if the bank counters at way over what's owed its not a short sale. And at that point I don't see how they have the right to counter for more than what is owed. It's 1) out of line and 2) they have no say at that point. So that's why I am asking is it even legal for them to make a counter over what's owed? To be clear it's the bank making this counter NOT the sellers.
  • 12-12-2014, 12:45 AM
    flyingron
    Re: Can Bank Counter-Offer for More Than is Owed when Doing a Short Sale
    The "BANK" can't technically offer anything. The counteroffer, though the bank may be an intermediary is between you and the seller. The side deal between the bank and the seller to release the security is between the two of them.
  • 12-12-2014, 08:46 AM
    adjusterjack
    Re: Can Bank Counter-Offer for More Than is Owed when Doing a Short Sale
    Quote:

    Quoting rangergts
    View Post
    Clearly if the bank counters at way over what's owed its not a short sale. And at that point I don't see how they have the right to counter for more than what is owed. It's 1) out of line and 2) they have no say at that point. So that's why I am asking is it even legal for them to make a counter over what's owed? To be clear it's the bank making this counter NOT the sellers.

    Yes, it's legal.

    Because there is no law prohibiting the bank from doing it.
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