One of the most important components of any successful short sale is what should you initial offer be or counter offer. Did you know most short sales fail and no counter offer is offered by the bank or mortgage company because the initial offer was much to low!
So what do you do? Do you just pick a number out of the air and pray that things work out, and that your offer is accepted? Why no! If you have been a reader of my tips and newsletter over the years, than you know I have a formula I use to make my initial offer or counter offer, if the bank has prepared a price ahead of your offer based on their BPO (Brokers Price Opinion).
Here is the formula that I have been using over the past 4 months which has served me very well and increased my equity position:
Here it is...
Step 1: I take the estimated or actual BPO amount or the value of the house, based on the comps then multiply that number by 65%.
Example:
$175,000 (Estimated BPO value) X 65% = $113,750
Step 2: I then take the number I got and multiply it by 92%
Example:
$113,750 X 92% = $104,650 INTIAL or COUNTER OFFER
Hope this helps.
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Be well,
James Gage
