What is the reason they are coming in so low? I do keep reading how low appraisals are interferring with real estate deals everywhere across the USA, but part of me wonders are lenders lowballing appraisals too? It is hard enough in a regular buyer/seller transaction, but this has at least temporarily stopped my short sale purchase, and maybe even permanently, if the bank does not agree.
In all cases where the appraisal has come in low, when requested by the buyer, as the short sale listing agent, I submitted a copy of the appraisal report to the lender, along with a signed addendum for the price reduction and a revised HUD1 reflecting the new price. I have never (knock on wood) had a lender decline the price reduction request. In fact, Wells Fargo just gave a price reduction to a price $10,000 under the appraised value because of the amount of repairs the property needed and because there were over $17,000 dollars in back HOA dues and assessments (the buyer took on all of that liability).
As a buyer's agent, I have also never had a problem having the short sale lender reduce the price when the appraised value came in low.
Just a point of interest. Fannie Mae is the main culprit in these appraisals that are over value. Just watch those properties that got turned down for a short sale show up a bit later as Homepath homes where no appraisal is required. It is rumored that Fannie Mae was not getting any loans from these short sales and this is one way for them to impact value and get loans from the short sales????? Not sure I can get Fannie Mae to validate that, but there are sure a lot more Homepath Homes avaialble and interestingly they are the same homes that they overvalued in a short sale and declined the short sale and then foreclosed on????? Locally, we have made reports to our State Attorney General who is looking into this and I would think it might behoove those of you in other states to do the same. Our Attorney General is not happy with this process and is taking measures to investigate it and stop it. Support from other states might get this dealt with on a larger level.