This is a great article that I have read and re-read. Kudos to Bryant Tutas for writing and sharing it.
From "Short Sales Are Serious Business And Require Serious Minds"
Posted by Bryant Tutas on May 23, 2012
"With a short sale we are submitting CONTRACTS, not offers, to the lenders. We are not asking them to accept an offer we are asking them to accept a "short" payoff so a contingency can be removed from the CONTRACT and the deal can close. Anyone who submits an offer to the lender to see if they will accept it does not know how to handle short sales and is wasting time and clogging up the system.
The lender is NOT a party to the contract(s)(listing or purchase). They do not control the purchase price and the commission..."
My question is, if the lender does not control the purchase price, what is the purpose for the lender to order an appraisal?
There is a contract between buyer and seller where purchase price has been arrived upon.
Why is it that the bank will not release a copy of the appraisal to the buyer or seller? How can a secret (always over inflated) appraisal ever be credible?
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I did not look up any guideline - someone in the office told me quite some time ago. I've called HUD for WF and BofA accounts that hadn't responded after a month of requests. I hardly think that they would help me if it weren't true. A quick look, I only found items 21 to 23 in the Uniform Residential Appraisal Report referred to by HUD that the borrow can use the appraisal, etc. But, it ain't my problem - I ask for the FHA appraisal, eventually they send it and HUD backs me, do I really need the guideline? (The answer is no..)
For FHA, they MUST release the appraisal to the seller. Once, they wanted a note from the seller, the other times, I just ask for it, although it can be like pulling teeth - they are so used to saying that it is private info paid for by the investor. Even in those cases you can fight hard and sometimes get it.
For FHA appraisals it is good info. I'd like everyone to request them - get the bank used to giving them out, too.
You can get a copy of an appraisal in FHA PFS most all the time and last week we did get an appraisal after pushing in a traditional sale. To be honest, I was pretty shocked and WE a third party firm got it, not the seller.
I would say that is not the norm though.
They will release the appraisal to the Seller but he must ask for it.
Really? I've never seen them release an appraisal and we always ask. What am I missing? Getting the appraisal would be huge!
The Seller needs to ask for the appraisal, they won't give it to anyone else. Ask your Seller to call the mortgage company and request the appraisal, they will give it to them. I have received all BPO and full on appraisals from the Sellers by them requesting. Most lenders will not tell you this.
I wrote that particular article several years ago. Lenders do control the price. They want to make sure they are getting as much money as possible for the property. They can use whatever valuation method they choose.
The lender simply controls what price (net) they will accept as a pay off. They will either agree, or not. They don't have to justify their own valuation(BPO) whether they should, or not. They are taking the hit, and they want to take the least hit possible. Thus, all the games, frustations and maneuvers we live with.