Given the aggressive counters recently, what happens if the loan appraisal comes back less than the short sale approved price?  Anyone had this happen?

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My first thought would be to ask the bank to revise the Approval Letter to reflect less than or equal to the appraisal value!
This just happened. House was listed for $349. Got several offers one at $359. We went back to the original purchaser and he offered $361k final offer. We submitted his higher offer. The bank did a BPO at $340k. We were all happy and ready to close. By the way, no knowledge of BPO until the appraisal came in. The appraiser said house was worth $320k. And that was after begging him to get it up from $310k. Nonetheless, we went to BOA and they wanted buyer to pay $20k difference. Who the hell will do that? The house was compared to homes on the same street. BOA was acting crazy. My defense was that they sat on the short sale for 5 months and had they approve it long time ago, the value would have been higher. The problem is that while they waited and played games, the values dropped. We continued to hound them with the facts. They have comps in the neighborhood of the EXACT home and they cant dispute that. The problem remains that they are doing an appraisal from their desk and not from comparables. AFter fighting with them for two days, they gave up and adjusted their price. Of course you have to lie to them. I told them we were closing in 2 days. It made them move their buns. Also, Fannie Mae got involved. The MI company got involved, so it was a 3 for 1 deal. Us on one end and BOA/Fannie Mae/MI company. Horrible experience, but we closed. Good luck. 757-353-7979 if you want to discuss further.
Sounds like you did your job. What you did is why most agents shouldnt be playing with short sales. They don't have the persistence necessary to go up agains the lenders ro the knowledge necessary to be able to do it. Especially one like BOA. Its also why its ridiculous to accept reduced commissions on short sales. You have drag these guys kicking and screaming into deals that will minimize their loss, Without good agents, they'd be losing hundreds of millions more than they already are.

Claudine Ellis said:
This just happened. House was listed for $349. Got several offers one at $359. We went back to the original purchaser and he offered $361k final offer. We submitted his higher offer. The bank did a BPO at $340k. We were all happy and ready to close. By the way, no knowledge of BPO until the appraisal came in. The appraiser said house was worth $320k. And that was after begging him to get it up from $310k. Nonetheless, we went to BOA and they wanted buyer to pay $20k difference. Who the hell will do that? The house was compared to homes on the same street. BOA was acting crazy. My defense was that they sat on the short sale for 5 months and had they approve it long time ago, the value would have been higher. The problem is that while they waited and played games, the values dropped. We continued to hound them with the facts. They have comps in the neighborhood of the EXACT home and they cant dispute that. The problem remains that they are doing an appraisal from their desk and not from comparables. AFter fighting with them for two days, they gave up and adjusted their price. Of course you have to lie to them. I told them we were closing in 2 days. It made them move their buns. Also, Fannie Mae got involved. The MI company got involved, so it was a 3 for 1 deal. Us on one end and BOA/Fannie Mae/MI company. Horrible experience, but we closed. Good luck. 757-353-7979 if you want to discuss further.
Thanks for the compliment. It's tough, but only a few agents can do what I do. The sad truth is that I have become a consultant. I dont represent buyers or sellers. This was my own personal home, but since the SS discussion, I have met at least 50 folks and help MOST of them. My own girlfriend whom I went to collge with was in foreclosure today. She called me just to chat on Sunday. By the time we were done, her foreclosure was stopped and she was on the CELL phone with the senior guy at Fannie Mae. She said her agent was a waste of time and if it were not for me, she would be in foreclosure. Her short sale was in process for over a year and 1/2. She should fire the agent, hire me and pay me 3%. lol. For a short sale, i would not take a dime. I hate BOA and all the dirt that comes with short sales. It's a long sale ironically. They took our tax money for bailouts and they are screwing the American people. WE all know foreclosures go in the bank's asset column and they can sell that note over and over. They think we are as dumb as a box of rocks. But if they keep it up, they will be BOAA aka Bank of Angry Americans and not BOA. LOL

Michael Davis said:
Sounds like you did your job. What you did is why most agents shouldnt be playing with short sales. They don't have the persistence necessary to go up agains the lenders ro the knowledge necessary to be able to do it. Especially one like BOA. Its also why its ridiculous to accept reduced commissions on short sales. You have drag these guys kicking and screaming into deals that will minimize their loss, Without good agents, they'd be losing hundreds of millions more than they already are.

Claudine Ellis said:
This just happened. House was listed for $349. Got several offers one at $359. We went back to the original purchaser and he offered $361k final offer. We submitted his higher offer. The bank did a BPO at $340k. We were all happy and ready to close. By the way, no knowledge of BPO until the appraisal came in. The appraiser said house was worth $320k. And that was after begging him to get it up from $310k. Nonetheless, we went to BOA and they wanted buyer to pay $20k difference. Who the hell will do that? The house was compared to homes on the same street. BOA was acting crazy. My defense was that they sat on the short sale for 5 months and had they approve it long time ago, the value would have been higher. The problem is that while they waited and played games, the values dropped. We continued to hound them with the facts. They have comps in the neighborhood of the EXACT home and they cant dispute that. The problem remains that they are doing an appraisal from their desk and not from comparables. AFter fighting with them for two days, they gave up and adjusted their price. Of course you have to lie to them. I told them we were closing in 2 days. It made them move their buns. Also, Fannie Mae got involved. The MI company got involved, so it was a 3 for 1 deal. Us on one end and BOA/Fannie Mae/MI company. Horrible experience, but we closed. Good luck. 757-353-7979 if you want to discuss further.
No kidding! Lots of agents are jumping on board with Short Sales, but it really requires some passion about gettting that approval from the bank or desire to help the homeowner to be successful. Agents just looking for a buck because short sales are out there really would do better to look elsewhere. Honestly with your drive on these deals you could/should get your license and get paid for your efforts.
I am a licensed broker, REALTOR®, ABR, CMP, CRS, CSP, GRI, BS, MA, MCSP, MIRM, SFR, but I dont represent buyers. I work directly for a builder. No drama in my life. Less work and liability. Short sales require a daily fight. Takes years off your life. 5 months of stress and then more fighting. I dont want any parts of it. The consulting part I like. If I could get paid for consulting people on how to win againt BOA or even to take them down, I am all for it. They put me through hell. This may not sound Christian, but I want REVENGE! lol Thanks guy!

Michael Davis said:
No kidding! Lots of agents are jumping on board with Short Sales, but it really requires some passion about gettting that approval from the bank or desire to help the homeowner to be successful. Agents just looking for a buck because short sales are out there really would do better to look elsewhere. Honestly with your drive on these deals you could/should get your license and get paid for your efforts.
You can be paid as a consultant on short sales. Lots of agents work for companies that turn the sales over to outside contractors to be processed. But, of course, you get all the stress that goes along with it.

Claudine Ellis said:
I am a licensed broker, REALTOR®, ABR, CMP, CRS, CSP, GRI, BS, MA, MCSP, MIRM, SFR, but I dont represent buyers. I work directly for a builder. No drama in my life. Less work and liability. Short sales require a daily fight. Takes years off your life. 5 months of stress and then more fighting. I dont want any parts of it. The consulting part I like. If I could get paid for consulting people on how to win againt BOA or even to take them down, I am all for it. They put me through hell. This may not sound Christian, but I want REVENGE! lol Thanks guy!

Michael Davis said:
No kidding! Lots of agents are jumping on board with Short Sales, but it really requires some passion about gettting that approval from the bank or desire to help the homeowner to be successful. Agents just looking for a buck because short sales are out there really would do better to look elsewhere. Honestly with your drive on these deals you could/should get your license and get paid for your efforts.
Several times. This is why it is important to have $$ down on a valid contract and an addendum to address the adjustment in lender value. When the lender value is reduced by their representatives, I WITHDRAW my offer, in writing, to the lender and proceed to submit a new offer. It's the equivalent of "wiping your slate clean" and starting over with valuable information. An experienced short sale listing agent will recognize the value in this immediately.
Is this "fair"? Puleez....after seeing the beatings some take in the short sale process, you are just leveling the playing field. Again, the listing agent's duty is to the seller, not the lender, in a short sale. Please examine that statement, in depth. To continue a counter offer, especially when all indications are the appraised value is lower than the lender's offer, will be like knocking you head against a wall.
Let me put it another way. In most cases, to continue such a ridiculous negotiation, your out is to escalate or request another BPO or better yet, an appraisal because you have proof that the value is not there. How long do you think an approval to reevaluate will take? When they finally get around to your request on both counts, do you think, as you escalate, they will really drop that low right away? Tick... Tock...Tick...Tock...
It is totally ridiculous to purchase a short sale property where the value the lender's negotiator has in mind is under water. Isn't that why it's in short sale? Don't invest emotions in this. Start over with the new information. The file specific to the rescinded offer is closed and you can start anew. There is more to it, but there is no rule that you must stay in the negotiations, if it's not going your way.They don't. I resubmit on many occasions and have done well.
Hey Alan, Can you share the addendum (to address the adj in lender value) you mentioned?

And just to clarify, when a lender value comes in higher than you know is best for the property, you withdraw the offer, and start fresh. Help me understand how this helps?

still learning, thanx, cj

Alan Remigio said:
Several times. This is why it is important to have $$ down on a valid contract and an addendum to address the adjustment in lender value. When the lender value is reduced by their representatives, I WITHDRAW my offer, in writing, to the lender and proceed to submit a new offer. It's the equivalent of "wiping your slate clean" and starting over with valuable information. An experienced short sale listing agent will recognize the value in this immediately.
Is this "fair"? Puleez....after seeing the beatings some take in the short sale process, you are just leveling the playing field. Again, the listing agent's duty is to the seller, not the lender, in a short sale. Please examine that statement, in depth. To continue a counter offer, especially when all indications are the appraised value is lower than the lender's offer, will be like knocking you head against a wall.
Let me put it another way. In most cases, to continue such a ridiculous negotiation, your out is to escalate or request another BPO or better yet, an appraisal because you have proof that the value is not there. How long do you think an approval to reevaluate will take? When they finally get around to your request on both counts, do you think, as you escalate, they will really drop that low right away? Tick... Tock...Tick...Tock...
It is totally ridiculous to purchase a short sale property where the value the lender's negotiator has in mind is under water. Isn't that why it's in short sale? Don't invest emotions in this. Start over with the new information. The file specific to the rescinded offer is closed and you can start anew. There is more to it, but there is no rule that you must stay in the negotiations, if it's not going your way.They don't. I resubmit on many occasions and have done well.

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