You Can End Up Overpaying
Failure to have a price cap in mind when negotiating the price of a short sale is a common pitfall. Usually, buyers are choosing to move forward with the purchase of a shortsale because they want to enjoy purchasing a nice home for a reasonable price. In fact, many buyers are able to purchase a much nicer home than they would be otherwise able to afford.
However, when a buyer places a bid on a home, the lender can come back with a counteroffer that includes a higher price. Also, since short sale purchases are becoming more popular among homebuyers today, there is a chance that buyers can find themselves in bidding wars with other potential buyers. Bidding wars can occur, which may drive the price of the home higher. In fact, sometimes bidding wars can take the price well above the actual market value of the home.
Although buyers may really want to purchase the home, failure to have a price cap when negotiating or bidding can lead to overpaying on the home. One of the main benefits of going this route is saving money on the home. However, without a price cap, there’s a chance that buyers will end up overpaying. Avoid this problem by setting a price cap. An experienced real estate agent can help buyers submit a good bid and can also help them come up with a reasonable price cap to avoid paying too much for the short sale property.