Question:

How big should the short sale offer be?

Answer:

To arrive at the short sale offer, here is an approach that only works if you have found on the MLS listings similar properties sold within a year or two. You could add them up and divide by the number of properties to arrive on an average market value. The expected short sale offer should not exceed 90% of the calculated market value minus any repairs the house may need.

Calculating A Short Sale Offer

The short sale offer for a house of appraised value of $250,000 should not be more than $225,000 minus any repairs the house may need. For example, if the house needs repairs for $25,000 a precise short sale offer should be in the range $187,500 - $200,000, or 75 to 80% of the original market value.  This calculation takes into account 10% discount for a short sale, 10% for house repairs and 75% starting short sale bid to increase to 80% of the estimated house value.

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