I offered full price on a short sale, but bank wants more, can they do that?

Can a bank ask for more money even if I offered full price on a short sale?

Today Kristin LaVanway and Dean Ouellette of the East Valley Team talk about how pricing a short sale is more of an art than a science and as a buyer you have little control.

Even though you offer full price in a short sale, there is no guarantee that the lender will approve the short sale at that price. Than banks do not set prices on most short sale listings, those are set by the seller and the agent. The prices should be around market price, and if it is close to market price the bank should be willing to accept it.

That being said there are factors that could determine if your offer will be accepted. The major thing is does the bank think if they accept your offer will it net them more money than if the house goes to foreclosure, think being the key word there.

The bank will hire someone to tell them how much the home is worth via a Brokers Price Opinion (BPO). One common problem is the BPO is out of line with what the market really is. A bad BPO can kill a deal, but it should not kill it. The problem buyers run into is they have no control over the situation at this point, all negotiations are going to happen between the listing agent and the bank. All you can do as a buyer is hope.

While a bad BPO can kill a deal, that is not the only problem that kills deals. Some agents just want an offer quickly so they can start negotiating. If the house you want to purchase is worth $200,000 and the agent and seller put it on the market at $175,000, even a full price offer is unlikely to be approved.

Bottom line yes they can ask for more. Once they ask for more you need to determine with your agent if that is because they have a bad BPO or the house is underpriced.

Thanks to Sasha Lopez (Slo) for taking time out of her vacation schedule to help us out.