There is a house I am pursuing that is about to be foreclosed on in Olathe, Kansas. Johnson County has assessed the property at $172,000, but is on the market for $210,000. What would be a good bottom dollar number for a short sale offer on this house in Olathe? I know the bank doesn’t want to foreclose on it because of all the fees included in it. Please help!

Q: There is a house I am pursuing that is about to be foreclosed on in Olathe, Kansas. Johnson County has assessed the property at $172,000, but is on the market for $210,000. What would be a good bottom dollar number for a short sale offer on this house in Olathe? I know the bank doesn’t want to foreclose on it because of all the fees included in it. Please help!
–Ally from Olathe, Kansas

A: You are certainly correct about the bank not wanting to foreclose on the property…they will recover much less of their investment should the property go to auction. However, it is somewhat misleading to base the actual value of the property on the tax assessment as those are notoriously off. The tax assessment is not a true value of the property. You would want to compare the home you are pursuing to other homes in the subdivision that have sold. This will help in determining the value of the home. Additionally it’s important to determine how many lien holders (lenders) the property has. While the primary lien holder may be willing to close for x amount, it may mean the secondary lien holder is left out and they and they may refuse to negotiate. When making an offer on the short sale, you will want to find out who the lien holders are, and who the investors are (FHA, VA, FREDDIE, etc) and if the mortgage liens are portfolio liens or investor loans because that will play a huge role in what your “bottom dollar” offer will look like, while still getting the offer accepted. I have a team of Olathe REALTORS who have experience and training in short sales and they will be able to help guide you. Wish you success in getting your home in Olathe!

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