DU Real Estate Wizards.... need your counsel.

[WilmywoodNCparalegal]

So, my SO and I are looking into buying a home. We don't have to go anywhere fast, but that $8000 credit is about to expire. Anyway, we saw a beautiful house in a nice neighborhood that is subject to short sale.

The asking price is $248,900 and it has been on the market for about 70-80 days. Initially, the same house was listed for $309,000.

The tax assessed value of the home is $257,000 (2009 tax assessment). It's a 3 bed/2 bath home, approximately 1560 sq.ft., with about .25 acres.

Knowing that the house was purchased newly built in 2005 for $255,000 and knowing that the current owners are in deep doo-doo (or it wouldn't be a short sale), I found that the interest rate was approximately 5.6% (that's being generous) and I calculated an amortization to figure out what, approximately, the lenders would still owe. I came to the conclusion that the current asking price would be similar to the mortage the current owners owe (I couldn't find out if there were any second mortgages out there).

The house is in great shape and well cared for. Before an offer can be made, there needs to be a pre-approval in hand. So, my SO has applied for a mortgage solely based on his qualifications, because my credit is trashed and if I were added as a co-borrower we wouldn't be approved for even $10.

Anyway, the only drawback to that is that my income (while not as high as his) would help us immensely. Today, he was approved for a mortage of $200K through our credit union, which to us sounds a bit low.

In the area where we live (SE NC coast), $200K means little, unfortunately. Now, area comparable homes are a mixed bag; some are priced in the $300K, while there is a home just down the street from the one we like that's a little bit larger (1700 sqft) and definitely not as architecturally pretty or with the same degree of upgrades, but that's on sale for $199,900. Another home at the end of the street, definitely not as nice and a tad smaller, is on sale for $210K.

Considering that this is a short sale, would we be off-base if we made an offer for $200K when the asking price is $248,900 and we have absolutely NO CLUE if the current mortage lender (Wells Fargo) would accept it?

We are still looking to see if there are other mortgage lenders out there who would be a bit more flexible and I bang my head for not having better credit to help out with my income, which would be an enormous help...

PM if you wish.

Thanks!

[mikeytherat]

1. A few thoughts:

1. For a home listed at about $250K, and initially listed at $300K, $200K is a pretty low-ball offer; however, the worst they will do is flat-out reject the offer. What may also happen is;

2. They will counter around $240K and the negotiation games will begin.

If you need to get the home for around $200K, you'll need to (in my case) "put on your size 13s" and offer about $180K, hoping they counter at $200K.

mikey_the_rat

[WilmywoodNCparalegal]

2. Thanks...

I just don't know what Wells Fargo would accept or not. At the same time, this area where I live is saturated with short sales, REOs and foreclosures.

It's very very difficult for us to come up with a number that sounds reasonable without getting screwed or buying a rathole.

[Godhumor]

3. PM sent

Feel free to respond, if desired.