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By Tara-Nicholle Nelson | Broker in San Francisco, CA

The Top 3 Real Estate Deal-Killers - and How Buyers Can Avoid Them

Once upon a time, homebuying was a much less dramatic affair then it is today.  The house hunt was fun, if suspenseful, and then there was another exciting whirlwind of inspections, closing and moving in. Today, though, as soon as buyers get the gumption to jump off the rent vs. buy fence, they find themselves on another edge - the edge of their seats, through the entire escrow process waiting to see what obstacle will emerge next, and whether their transaction will survive it. 

Deals get killed all the time, and buyers can't relax until they have keys actually in hand.  Here are three of the most common real estate deal-killers, and some steps buyers can take to deactivate them.

1.  Appraisal too low. Some buyers incorrectly believe that the best thing that could happen to them is for the property to appraise below the agreed-upon purchase price, expecting that a low appraisal forces the seller to bring the price down.  In fact, so many of today’s sellers are barely breaking even, that a low appraisal is probably the most common deal-killer around. If an appraisal comes in just a tad bit lower than the contract price, usually the seller will come down if they can, or the buyer will kick in a few extra bucks. But when it comes in 5, 10 or even 20 percent low, most sellers can't - and most buyers won't .

Low appraisals also seem like the most difficult deal-killer to avoid, as this process is entirely out of both buyer's and seller's control. But there are two things buyers can do to minimize the risk.  First, check the comps - i.e., recent comparable homes that have sold in the area - before making an offer; your agent will help you do this. Then, don't make an offer bizarrely above the average range of the comparables, even if the property has multiple offers, unless you're prepared to deal with a low appraisal a couple of weeks out. 

Also, consider working with a local mortgage broker who also originates loans through its own bank (vs. walking into a large bank's branch off the street); these lenders have the ability to choose from a smaller pool of appraisers that they know are qualified and knowledgeable about your area.

2.    Property condition dramas. When the market melted down, lenders found themselves with a lot of decrepit homes on their hands. This explains two things: (1) why lenders are more concerned about property condition now than ever, and (2) the raggedy condition of so many of the "distressed' homes on the market.  Homes that have extensive wood rot, dangerous decks or electrical systems, or peeling paint and missing systems (sinks, stoves and the like) are highly unlikely to pass muster when the appraiser walks through, even if they do qualify as being worth the purchase price.  And while an individual seller might be willing to do some work, many just can't afford to; short sale and REO sellers simply refuse to make fixes, 9 times out of 10.

Prevention is the best medicine for curing this transaction ailment.  If you are buying a short sale or REO property, be aware that when the selling bank says as-is, it really means as-is.  Ask your mortgage broker and agent to brief you on what sort of shape your lender will require your home to be in, at minimum, and keep that standard in mind during your house hunt.  Your agent can help manage your expectations about which properties will and won't likely pass muster. 

3.    Loan approval takes too long.  Every buyer knows they must get preapproved for a mortgage before they start house hunting, but many don't know that preapproval is just the first in a long list of steps that have to happen before the loan becomes a sure thing.  In fact, it's common now for buyers to get their loan preapproval many months before they end up in contract, and lots can change in the interim - further extending the time it may take for their loan approval to come in. 

It's common for contracts to include a standard loan contingency period of 17 days, give or take a few.  But the appraisal might take longer than that to come in, or the underwriter might have lots of questions and seemingly random nitpicks about the appraisal, or about you: they want to see your driver's license, then your marriage license, then your divorce decree, and after that, a letter from your employer agreeing that you'll be keeping your job even though you're moving an hour away. It never seems like they ask for everything at once, thus it can take longer than 17 days to obtain all the requested items, turn them in and get the underwriter to sign off on them. 

Until you get that green light, it's foolhardy to remove your loan contingency, as that step renders your earnest money deposit non-refundable, under most contracts.  Many a buyer is forced to either secure an extension from the seller or to let the transaction die, rather than forfeiting their deposit funds.  And again, some sellers understand and will play ball, but bank sellers can be particularly resistant to loan contingency extensions, especially if there are backup offers on the table.

Best practice for buyers to minimize the chances of an overtime loan approval process killing the deal? Be ready: be ready for lots of bizarre documentation requests, be ready to provide things you've already been asked for, and be ready to do so quick-like - without pushing back.  The faster you can turn around the things the underwriter wants, the better. 

Also, it can be very helpful to work with a mortgage broker and agent that have worked together before and have close communications, so that your agent can stay abreast of any and all loan process glitches and keep the listing agent apprised of the legitimate reasons you may need an extension throughout the contingency period, rather than assuring them everything's speeding along then having to ask for a last-minute extension.

Agents: what other deal-killers are you commonly seeing?  How do you help buyers correct for them?

P.S. - You should follow Trulia and Tara on Facebook!


By Edyta Gryc - Broker Associate,  Sat Sep 17 2011, 20:59
In short sales-time. After months of waiting to hear from the bank, some buyers just walk away from a deal. It is important to make sure that clients know what to expect when it comes to a short sale.
Tara-great post as usual!
By Tara-Nicholle Nelson,  Sat Sep 17 2011, 22:36
Very common, Edyta - you're right. Thanks!
By Carmen Brodeur- Top 1% Realtor,  Wed Sep 21 2011, 15:48
Appraisals have killed a lot of deals in Arizona.
By Adrian Chu,  Wed Sep 21 2011, 16:37
Thanks for sharing!
By David Watson,  Thu Sep 22 2011, 09:45
I take issue with the article.
Most deals are FHA these days (around here). No lender has ANY control, be they large, small, or Uncle Joe over those appraisals.
By Bob Jonas,  Thu Sep 22 2011, 09:52
Septic systems! Another headache!
By Brandi,  Thu Sep 22 2011, 09:56
As someone who is currently employed by one of those smaller family owned banks, David is absolutly correct. We have no control. We smaller banks can't afford to keep the loans in house, and getting your average family to quality for an FHA is almost impossible. Even for me..
By Chelle5852,  Thu Sep 22 2011, 09:59
I was pre approved, but still took two months to get the actual funding, thank god their were no other offers on the home, I close this afternoon.
By Ardell Dellaloggia,  Thu Sep 22 2011, 10:02
In 21 years I have yet to have a problem with an appraisal. Makes me wonder if that problem is a result of the agents not pricing properly as to the listing price or the offer price, vs an "appraisal" problem. Knock on wood, of course. There's always "a first time". I have had one go to "Field Review" because the house was in a rural area with few comps within a mile. But that was more about geography than valuation.
By Carolyn,  Thu Sep 22 2011, 10:03
I would not worry about sellers breaking even and trying to help the by paying more than market price. The seller is probably buying another house at market. This is the seller's problem. If it appraises lower than your contract price, then unless you plan to be there forever, get out and find a house that appraises for what you are paying. In this market where prices are going down, not up it's more important than ever not to overpay for a house.
By Diane Nielson,  Thu Sep 22 2011, 10:04
Thanks for the article. All good advice and reminder that it is not only in or best interest but our responsibility to educate both buyers and sellers.
By Pamb,  Thu Sep 22 2011, 10:08
I'm a cash buyer in TampaBay, worst deal killer for us over this last 6 months: tricky realtors accepting offer, submitting to bank, getting approval, then not signing contract. Leaving house active on MLS until higher offer comes in. Lost 2 so far that way. Gave up, no more short sales. In contract now, overpaying for house so seller stays in the black, can't insure it until WE reroof it. (Insurance companies have stricter inspections than lenders here) If I demanded they reroof, they'd have to take it to short sale. Oh Well. Getting the dream home. It'll be worth way more than what we pay in a few short years.
By KEECHA,  Thu Sep 22 2011, 10:12
I have had two deals to go bad based on appraisals. It's so frustration.
By Carolyn Mosley,  Thu Sep 22 2011, 10:15
Unrealistic expectations are deal killers. Buyers: in a down market sellers are NOT going to accept any offer because you listened to the news the previous night…and sellers: just because your diy project cost you x dollars does not mean that you can recapture that cost plus.
By Greta Thomas,  Thu Sep 22 2011, 10:22
Great Article Tara, as always!
By Deborah White,  Thu Sep 22 2011, 10:27
home inspections seem to kill alot of deals in West Virginia. First time home buyers are just easily frightened of the least little issue.
By Deborah White,  Thu Sep 22 2011, 10:28
home inspections seem to kill alot of deals in West Virginia. First time home buyers are just easily frightened of the least little issue.
By Buddy G,  Thu Sep 22 2011, 10:31
If you are a buyer and you have been pre-approved, your Mortgage Loan Officer should have given you a "tips" sheet listing what specific property imperfections are typically problematic for the type of loan you seek. And generally, buyers do their home inspection prior to the appraisal. The home inspection should reveal grave issues with the home that a buyer and the buyer's agent should know well in advance that will likely be appraisal problems. Sometimes the parties play dumb or just go through the motions hoping that something will miraculously be overlooked. This is foolish and a big waste of everyone's time, not to mention the time the house is in "contingent" status.
By Kathy Becklin,  Thu Sep 22 2011, 10:35
Agree that lenders have no ability to select appraisers. But an agent who has done comps can challenge the appraisal. Recently, my buyer clients were first appraised at sales price. But a desk review was ordered and came in 6.5% under. Sellers were near short; buyers weren't going to come up that far. I challenged it and we were given the opportunity to order a new appraisal (at buyer's cost) that again came in at sales price. It took 30 days longer than expected but we held the deal together. IMHO, appraisals won't be truly 'independent' until appraiser is not give sales price.

The other deal killer is changing loan programs! One day you qualify, the next you don't. Have a delay in the process and you don't get the loan.
By Michael,  Thu Sep 22 2011, 10:38
Takes too much time to close, in my opinion. Should be like buying a car.
By Michael,  Thu Sep 22 2011, 10:40
Takes too much time to close, in my opinion. Should be like buying a car.
By Keith Bowman,  Thu Sep 22 2011, 10:45
How about the buyer who asked my seller for $20k in repairs. (15% of the contract price.) I figured all items easily at $5k. They did not want repairs, they wanted a new selling price. Automatic red flag for his lender. I know the buyers are in the drivers seat but, really?
By Katie,  Thu Sep 22 2011, 10:50
I think some of you just aren't familiar with what's going on in other markets. We were one of three families to put in a full list price offer on a property the day it went on the market, and it STILL appraised for $18K less than list price. Three parties were willing to pay the full list price and the appraisers disagreed. That makes no sense to me.
By David Barr,  Thu Sep 22 2011, 10:51
This article is so far away from reality it's making me laugh. What's the comparable price adjustment for peeling paint on an appraisal, Tara?

No where does this article mention short sales. It doesn't take longer to get loan approval. It takes longer to get the seller's lender to agree to the price on a short sale than a traditional sale. The appraisal doesn't mean the seller is netting less, because the vast majority of sales are short sales.
By James H Whitaker,  Thu Sep 22 2011, 10:54
I am a seller-by-owner. The above items are right now happening to our buyer. We have made two (2 X 15 days) extensions. I was told by the mortgage broker that the buyer was 99 per cent approved. The underwriter needed a couple more days. Does any one out there have any pointers/advice for me that will help this get approved. We are three months out on the current contract.

Just waiting??
By tpugliese@ushomecap.com,  Thu Sep 22 2011, 10:57
Number One: Is Wrong, going to a mortgage broker will not solve the problem. HVCC is a law, see guidelines here
https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/hvccfaqs.pdf. You cannot select an appraiser like you have in the past. The best solution is to use a "Direct Lender" that does not use a National Appraisal Management Company but instead created a "board of appraisers in their lending area" setup through a company like http://www.mercuryvmp.com/. This then meets the standards of HVCC and may minimize problems that can occur by a selection of an outside the market appraiser.
2. As Is means As Is, if you sign a contract, you are locked in. If the appraisal comes in with repairs those repairs have to be completed prior to closing and the appraiser has to return to verify repairs are completed. The problem here is the extent of the repairs in terms of dollars. If the buyer does the repairs prior to closing to satisfied the lenders requirement or 203K may be necessary. Buyers who sign a contract for "As Is" should always have an inspection clause and limit clause on repairs in order to ensure that there are no serious problems beyond what is visible.
3. Your conditions on your mortgage should be available to your loan officer within 24 hours. The only reason preventing an official commitment is the appraisal. Once the appraisal is complete a commitment should be issued. Commitments and appraisal should be taking no more than 10-15 days today. I don't think a mortgage broker is able to offer this service because he has to process the file based upon what they believe they need, get the appraisal then send it out for underwriting. At this point, the underwriter provides them with additional conditions that they need to get and submit to hopefully get cleared before a commitment is issued.
By Elise Timpe,  Thu Sep 22 2011, 11:04
The laws that are in effect have been put into place to prevent lenders from pressuring appraisers to make the "right value". The lenders have no say on who the appraiser will be or have any "input" into the appraisal process.
HOWEVER, there is no reason why the listing or selling agent can not be the "contact person" for the appraiser and helpfully show up with comps and a smile.... This CAN backfire, however...my husband has been appraising since 1983 & I've constantly heard stories of agents bringing comps from another town, or much larger homes, etc...like they just put the price in the MLS and brought the results. We Realtors are responsible to have a basic knowlege of how to value a property. Bone up and meet your appraiser!
By Lyette,  Thu Sep 22 2011, 11:04
Good article, very helpful
By Randel Melhorn,  Thu Sep 22 2011, 11:04
As a mortgage broker, I can tell you that a lot of delays can be headed off by a real preapproval. For example, if the house needs repairs or updating the buyer and he agent should be educated in the FHA203k loan. A lot of the delays are self inflicted. If the loan professionals know there is going problems, take care of them in advance.
By David Boccabello,  Thu Sep 22 2011, 11:05
As a seller, I had my home with an agent who priced it at $220,000 CMA. Three months and only two showings I dropped the agent...had a Certified Appraisal and Certified Inspection done and dropped the price $31,000 to where it belongs. Now have a great inspection with no major problems to show a buyer and an appraisal to justify my FSBO price.
By Catherine Martin,  Thu Sep 22 2011, 11:32
I have read many comments that made me wish one or more of you were a friend. A friend who I could invite over for a chicken parm. (made from scratch, and 4-5 star rated!) dinner and then "pump" for some "newbie" questions. LOL We have been trying to buy a home in Fla., have made 2 bids (and 2 trips) and lost both!! :( Last bid we lost to a buyer who was an investor with CASH!!!! Hard to beat. :(
By Mark York,  Thu Sep 22 2011, 11:35
I can see why many buyers walk away from short sales. Once an offer is in, a cash offer with no mortgage contingency, the bank, B of A in this case, refuses to respond after months. You can't even get rejected. There has been a new appraisal and the agent can't find out what it is.
By Melanie Thomas,  Thu Sep 22 2011, 11:38
This is an excellent post that should be required reading for all prospective buyers and sellers. Thanks for the insightful comments.
By Catherine Martin,  Thu Sep 22 2011, 11:39
Would anyone want to spare a few e-mails for someone who wishes to move to Fla. (from NJ) and has run into "problems??? Lost 2nd bid (house), and 2nd trip, to a cash investor. We have a few "newbieish" questions. We have a few agent questions. We have a few bid/blank checks/"back-out times/closing... questions. We notice that many of the peoples that leave responses/comments seem to be quite knowledgable. Always a bonus!! :) Thank you for reading at least.
By Kevin Olson & Jessica Laude,  Thu Sep 22 2011, 11:43
The low appraisal is almost an expectation regardless of comps. I think it's amazing when an appraiser wants to know the contract price... I never realized that had an effect on the value.

It's also neat when an appraiser gets paid more to go back to a property when repairs are necessary. Is work a little slow? Find a needed repair and you can get paid to come back out to give a "yes" or "no". There has to be a better way to accomplish what is needed.
By Keith Bowman,  Thu Sep 22 2011, 11:50
Nightmare on BOA street ! lol Feel your pain Mark....
By Jason,  Thu Sep 22 2011, 11:52
I am in the process of moving for work from WV to AL, this is my first out of state move but not my first home purchase or sale, but I have a major issue with the appraisal process this time, I have had three appraisals in the first nine months of this year and they are $50K apart, and the cost per square footage is all over the board, also on the three appraisals there are three different square footages listed, and last Ichecked the house hasnt grown or shrank in the last nine months. The person performing the appraisal seems to be able to put down whatever they want, with no accountability, seems like what ever mood they are in or if they are in a hurry really matters in he process, and it should not matter at all. Dont get me stated on the licensing of an appraiser, the entire "work under someone fo a year" is a joke, who wants to train their competition, not to mention limiting the talent pool to "who you know" and not "what you know" or your ability to perform a accurate appraisal.
By Saundra Malloy,  Thu Sep 22 2011, 12:09
LOVE these articles and the feedback that follows! Great info. for newbie" realtors like me. Thanks!!
By Patsy Forbus,  Thu Sep 22 2011, 12:11
have been trying for 6 months to buy a house always a problem comes up and property cant close this has to do with mortage insurance, wanting seller to reimburse for loss on short sale and or sellers bank wont approve short sale offer. another issue being out bid by another contract on same property. Time passed and commitment letter expired have to go thru under writing again. the worst experience of my life. the process is almost complete now hope to close a different house soon . buying a house should be happy occasion !! what is wrong with the system? these things should not be happening., determination has kept me moving ahead.
By Dmd_mo,  Thu Sep 22 2011, 12:17
I think I may have learned as much from the "comments" after the article as I did from the article. Would have learned even MORE if people would take the time to proofread and use the correct words (i.e., "or" vs. "our"). ;)

We're in a situation with TWO mortgages 'cause we bought the "new" house three years ago when we THOUGHT the market had bottomed out, only to have the mortgage crisis and appraisal mess-ups hit during that three-year time period. We, too, had a realtor who did very little, so we dropped her and are now doing for-sale-by-owner.
By Thinkingitover,  Thu Sep 22 2011, 12:30
Re:Michael@10:38. Caution! Was approved for "drive this car off the lot today!" 1 week later, Sales Dept.:"Sorry, but you don't qualify for THAT car, BUT, we can put you in a brand new ____ for only $____/month!" Luckily, a friend who had worked for that company told me to call their bluff & tell them, "Sorry, No Sale. Have a bank check for my down pmt. ready for me by noon tomorrow". An hour later, sales manager apologized for the "mistake". My response:"Maybe the monthly pmt. IS a bit high for my income." Result: I got the car at a lowered monthly pmt.! If you think today's lenders are more ethical, check out Consumer Reports Complaints on your lender & others. They count on buyers' panic & lack of savvy to outsmart them quickly. Without my friend's experience, I might have ended up paying more for a car (home?) I didn't want. And that deal involved merchandise that depreciates, unlike real estate. Our home was recently "stolen" from us in a hurried foreclosure & trustee sale. Our lack of real estate savvy + the possibly illegal misleading info from both lender & trust company may have sunk 36 years of hard work & retirement planning. Our only saving grace is that the processing time may give us enough wiggle time to save a family legacy our grandfather built with future generations (ours, our daughter's and grandchildrens' ) in mind. Do not desire what seems quick & simple over some thoughtful patience for a sound and ethical purchase. Also, and this is meant kindly, never have the hubris to think it can't happen to you. Maggie, John & family.
By Lionspurr,  Thu Sep 22 2011, 12:39
Good article and informative comments.
We are in the process of a short sale which began the beginning of June and the seller has yet to sign the P&S. Our realtor has been great, letting us know it can be a slow process, but it seems to me that with the market the way it is, banks would be more willing to get things wrapped up a bit quicker. There are no other offers and the house has been vacant for almost a year. This is why more and more houses deteriorate on the market. I wonder why legislature does not step in, with all the "improvements" they are trying to make, this would certainly benefit the real estate market.
By Rhonda Lawson,  Thu Sep 22 2011, 12:39
@Catherine... try going onto ActiveRain site and finding an agent knowlegdable in the area you are searching. There are some great agents on that site and you can learn about them through their blogs and profile. Good luck with your house hunting =) A good agent makes all the difference.
By Ernest Worell,  Thu Sep 22 2011, 12:45
As a veteran home inspector I have done thousands of inspections and for the past several years many of the "as is" properties. Most of those we did that the buyers walked away from the home was a "pile". When the homeowners don't care enough to even do the rudimentary upkeep and routine upgrades it does not take long for the home to deteriorate to the point no one wants to buy it, especially if they are looking at a huge sum of money just to get into it and then additional money to make it habitable. Some of the homes we have done were trashed by the owners when they lost the property and the banks were NOT going to reduce the price. In those cases we did not "kill the deal", the house did. We simply wrote the obituary. The longer a home sits empty the worse it gets. It does not stop deteriorating just because no one is home. Plumbing gaskets dry out and shrink then when water is reintroduced there are copious leaks throughout. Critters move in and do their own thing, The property gets overgrown and starry eyed buyers (particularly first time buyers) get a dose of reality when they start adding up the sums of money it will take to get into the home, suddenly realize they can buy one of the many NEW homes sitting on the slow market. Every one of us should be making wheelbarrows full of money but with this quirky market it is not happening.
By Brad Zimbelman,  Thu Sep 22 2011, 12:46
Great article, Tara. Appraisals have created many headaches on properties in our active adult communities such as Sun City and Sun City West. It does pay to use a lender whose appraisal pool includes appraisers that are familiar with an area and its unique characteristics.
By Voices Member,  Thu Sep 22 2011, 12:51
To Patsy Forbus, short sales are subject to 3rd party approval, no matter how you cut it. I admire your determination to stay on your mark to becoming a homeowner. Good time to purchase. Good luck on your endeavors.
By Voices Member,  Thu Sep 22 2011, 12:54
One other comment I would like to make about appraisals. Closed on a deal on Aug ll. The bank that did the loan ordered their appraisal who was picked at random, and the agents couldn't talk to them. But it came in above the sale price.
By Thinkingitover,  Thu Sep 22 2011, 12:59
Re:Catherine Martin. Just posted a comment that included,"' Check Consumer Reports Complaints about certain lenders. As the truth is an affirmative defense against libel, please check out the Consumer Complaints about PHH Mortgage. Their main office is listed as 1 Mortgage Way, Mt. Laurel, NJ. I make no claims about the truth of the complaints. It SEEMS that they MAY purchase blocks of loans from JP Morgan Chase that are either in deficiency or LOOK like the owner could BECOME deficient. It also seems that they MAY deal with many properties in Florida. As I said, I can't say for sure if the complaints are accurate. I can say I read quite a few. Looking up complaints or compliments in Consumer Reports may give you some helpful information. One thing more, it SEEMS that if one calls Customer Service in what one thinks is a local NJ office, one may end up speaking to a representative in India or Australia who MAY be reading their response from a "script" and MAY not know any more about real estate than I do about quantum physics. Good luck and be careful. Maggie, still, "thinkingitover".
By Anthony Stephenson,  Thu Sep 22 2011, 13:01
Lenders that do not follow thru with their closing date commitment are so very frustrating.. It makes an increasingly difficult process even more difficult. My advice is get lender referrals from fellow Realtors. If the lender still doesn't perform then mark them off the list and move on to one more customer service oriented.
By Michele Allison-Elwell CBR,  Thu Sep 22 2011, 13:03
Short sales can take a lot of time. Many Months. Don't be in a hurry to close. Be willing to wait. Make sure proper wording is put into the contract so that you are free to withdraw from an offer .Find out ahead of time what bank holds the mortgage - BOA can take 4+months to accept or reject your offer .If 5 nicer homes just came on that are in better shape you want to be free to move on.
Buyer's please - Get pre-approved first!. Nothing like thinking you can buy at X only to find out you can only afford D. You will be disappointed and have wasted time for all parties.
When writing offers on property- Please know what the fair market value is in the last 30 days within a 1 mile radius. Write into the offer - Contingent upon purchase price meeting or exceeding the bank appraisal. Buyers don't have extra money if the home comes in low. Mr. & Mrs. Seller may need a reality check. Want it sold- lower your price.
By Kris Krenz,  Thu Sep 22 2011, 13:04
I find the problem is that local realtors have a specific mind set on specific neighborhoods or properties. I currently have an open waterfront house for sale in Brick, NJ through a highly qualified local realtor. Irene hit and our property was unscathed. Many other homes, which are lower lying, didn’t fare so well. Our property is in an older neighborhood, but the area has turned around regarding families and aesthetics. The neighborhood is also quieter than most. This area also has many stores and restaurants within walking distance. Everything a buyer could want! Yet because all the newer houses are on the other side of the water, which this area is considered very prestigious, our property is overlooked. We compensated for this in our price. Our house built in 2005 is almost $300K less expensive versus similar houses we face. When Irene hit most of those home suffered flooding and or other damage. I was shocked to find out that a house where the beach was washed away and the dock damaged that a potential buyer could not be convince to give our property a once over. It was an older house, without the upper end amenities as well as more expensive. Are buyers fools? We are talking the same town here.

My house has been inspected, appraised and the price is correct. The big issue I find is that Realtor’s here in NJ have so much inventory that they only focus on their own listings versus other agencies. When we switched realtors, I found we had have new life to our listing and the old realtor who knew the property well is a no show. Why? This should never be the case. I’ve come to the conclusion that the buyer has to find a quality property on his or her own. But how do we ever know if they are steered away due to prejudice. – I find this to be a concerning problem. Have other sellers experience similar? Again we are talking about NJ. I've dealt with realtors in other states and find a completely different attitude. I just want my house shown.
By Fred Berger,  Thu Sep 22 2011, 13:09
Good comments, especially by Jason, I had a appraisal done on a home at the beginning of the inflated house prices. This house was built in the early 1950s, no upgrades at all, only roof shingles. Two bedroom one bath single carport, no landscaping. Heating was a gas wall heater. I was the seller and the estimated value in prior year was around $50,000. Now this takes the cake, The appraiser found one thing wrong, Had a roof leak at the corner of the car port before the roof was replaced. His appraisal price came too $254,000. I sold it to a single Mom and her daughter for $100,000. I never saw a happier person in my life. Who were these appraisers getting a kick back from? By Fritz
By Sarah Cole,  Thu Sep 22 2011, 13:23
I would just guess that we will all see a lot more rent to own and owner financing situations in the days to come. We are selling and we have gone down this road of owner financing ourselves. It solves a lot of current problems with the ways of the world currently. Just like credit card companies will someday pay their comeuppance, so will the lending institutions. Just my biased opinion for what its worth.
By Househunter123,  Thu Sep 22 2011, 13:49
If you read the comments you will learn exactly why we are in this situation today. It is called Fraud as well as
stupidity and greed. Thinkingitover and others clearly show the problems. I could write a book on the problems we encountered with realtors buying and selling properties over the last 4 years and we were cash buyers. You might also note that I have been a real estate investor for over 40 years. Fraud will bring this country to its knees because people are afraid to do anything - and a house can really mess up your llife. When my sister was able to get a real estate license, I knew things were bad. Laugh but I think it is sad.
By Helen Oliveri,  Thu Sep 22 2011, 13:50
Great tips Tara!
By Aselwood,  Thu Sep 22 2011, 13:51
To Kris Krenz,
Yes, Kris, it only takes one buyer and your property needs to be shown, but the market is dire and more complex than you might be aware of as a new seller. You must be patient if you can hold on in this economy--lots of competition out there
. A "correct" price is the one that a buyer will offer and that unfortunately seems to disregard appraisal values of interest mostly by a mortgage lender sometimes. A contract is only as good as an agreement reached by buyer and seller. Wish you well, you might be surprised to get the offer you seek come out of the blue soon.
By Sailor 1648,  Thu Sep 22 2011, 13:59
Tara;Do you Know anything about where Insurance Property Policy/ get there info for policy ? or for that matter, Real Estate Appraisers? Well Missy, they go to County Tax Assessment! If it's out of Date-(OLD)- or Improper ZONING-Diff.- it's A DEAL Killer with the LENDER! It's up to Your Reality Agent to Correct county Records, not the Seller or Buyer!
By Justin Ruzicka (239) 699-0517,  Thu Sep 22 2011, 14:02
These three are key, but how about a 4th, one we don't like to mention but happens a lot...that is having TWO agents who are bad at communicating....UGH, hey you know it's true. Here is a good blog about other "hiccups" buyers face in this market.


Thanks for the good read, Tara!
By Tonypatgomez,  Thu Sep 22 2011, 14:06
Another deal breaker is a lazy realtor. I'm working with Keller Williams, the seller is working with Remax and he is about the laziest person imaginable. We were suppose to close by Aug 21, here we are 9/22.
Apparently problems with prior deeds, probates, so title company is researching and my realtor is constantly in touch with title company even went to court house to find necessary documents for the title company while Mr Remax sits and does nothing because his commission is only 3%. Ok thats the deal he signed and now he wants to act unprofessional and not worry about closing this as soon as possible or lifting a finger on his part ??? I wish I knew who I could complain to. We tried his office manager and she could care less. If we dont close by 9/22..this deal is dead too.
By Lynn,  Thu Sep 22 2011, 14:06
In the midst of purchasing an REO (BofA) owned property. Lots of hoops to jump through. Everything stated in this article is accurate. We are (and have been) on the edge of our seats awaiting our nearly daily instructions to re-submit everything to our lenders underwriter's. Lender's ultra cautious at this point in time, understandably so but in our view if we can respond quickly to these (some seemingly outrageous) requests, it will be worth it in the end to have those keys in hand!
By Tonypatgomez,  Thu Sep 22 2011, 14:07
Another deal breaker is a lazy realtor. I'm working with Keller Williams, the seller is working with Remax and he is about the laziest person imaginable. We were suppose to close by Aug 21, here we are 9/22.
Apparently problems with prior deeds, probates, so title company is researching and my realtor is constantly in touch with title company even went to court house to find necessary documents for the title company while Mr Remax sits and does nothing because his commission is only 3%. Ok thats the deal he signed and now he wants to act unprofessional and not worry about closing this as soon as possible or lifting a finger on his part ??? I wish I knew who I could complain to. We tried his office manager and she could care less. If we dont close by 9/22..this deal is dead too.
By Dan Ferrara Jr,  Thu Sep 22 2011, 14:14
Great article. These are just a couple of the many pitfalls of real estate. Working with great agents are the best way to avoid many problems, but even then there still is no guarantee. - Dan

By Eileen,  Thu Sep 22 2011, 14:16
My husband & I are in the process of listing our townhouse, in order to purchase a house. After reading this article and the comments, I'm not so sure we're doing the right thing. We are both retired and in our 60's and maybe just feeling a little intimidated by all of this. We cannot purchase a house until we sell our townhouse. My greatest fear is that once the townhouse sells, we could run into problems, such as obtaining a mortgage at our ages. I don't want to sell our townhouse, only to be left homeless! Any advice/comments are greatly appreciated. Thank you.
By Barbara Agnew,  Thu Sep 22 2011, 14:23
I recently was unable to purchase a home, that we had been working on for over 6 months, because 1/4 of the property was under the 100 year flood plain. I knew it was property that required flood insurance, which was a bit expensive, but did not know that anything under the 100 year plain was a deal breaker. The seller knew 1/4 of the property was under, but never said anything. I cashed in a retirement account to pay off debts to help my debt to income ratio, and now have no account and no house and alot of frustration. Why don't these loan companies tell you what the deal breakers are UPFRONT? It would have never gone that far, if I had known in advance.Ask Questions Upfront!
By Aja,  Thu Sep 22 2011, 14:37
I had the issue with the loan approval taking too long. It was quite an unfortunate process back and forth to underwriting to actually lose the deal ad be threatened that they would keep my downpayment. I almost lost my mind but I am much more experienced with the process and now just hoping that I can find something that fits my needs, budget, and idea of the perfect first home! I appreciate these articles and words of advice while searching for a home.
By Annmail1,  Thu Sep 22 2011, 15:06
My deal killer was not being approved for a loan, after it took weeks, and weeks, and weeks for the mortgage company to get its act together. I have a credit score of 808, was putting 20% down, and have NO debt, other than revolving credit card bills. I outright own a condo worth $265,000. In the end, it was all about the debt to income ratio. I was 3% too high. I didn't realize that you could have substantial assets, but unless you are willing to liquidate all those assets and hand them over to the bank, they don't give a damn how much you are worth. Sooo.. I cut my losses and paid my fee to the lawyer, etc. Plus. the house was appraised twice, due to the hurriciane, and I had to pay for 2 appraisals. It's like a money making scam, to get you to pay all these people in the real estate business, only to have the deal fall through at the very end. What a racket. I'm going to live mortgage free in my condo, and all these real estate people can go suck it, while I save up ALL my money.
By Mike Harding,  Thu Sep 22 2011, 16:05
Thanks for the article. I would say that banks that take too long to get approval is another. Even buyer's that have been warned going in, can lose their patience after months and months of waiting.
By Michelle Ticconi, RS,  Thu Sep 22 2011, 16:07
Wonderful article Tara, specially great advice to buyers when it comes to work with local mortgage broker who also originates loans through its own bank to avoid low appraisals. In my market (Hawaii/Oahu) we see this frecuently and it is a shame because when you read the appraisal you notice the lack of knoledge of the apprasier in the area.
On a positive note you can always get a second opinion! :)
By Marilyn Goldstein,  Thu Sep 22 2011, 16:53
In order to avoid losing a sale because of an appraisal lower than the SELLER expects to sell the house, is it wise for the SELLER to have the house inspected BEFORE there even IS A BUYER???
By Marilyn Goldstein,  Thu Sep 22 2011, 16:55
In order to avoid the loss of a sale, is it wise for the SELLER to have the house appraised PRIOR to listing the house?
By Sarah Cole,  Thu Sep 22 2011, 17:12
If you have it assessed before selling by a certain assessor then who is to say that the next assessor will have the SAME findings as the first??? That's the problem because there opinions.
By Annmail1,  Thu Sep 22 2011, 17:15
Why is everyone acting like preapproval will make your life easier, in the long run? I was preapproved for the exact price that I offered on the home that I was supposed to buy. I was told by 3 mortgage companies that I would get a loan "no problem", because of my top notch credit rating and assets. When it came time to get actual approval, it all fell apart. I was lucky to get my deposit (well, most of it, back) My advice - when you see a home you want to make an offer on, go to a mortgage company and ask for a loan before you make an offer. Get the official tax info, and any other fees (HOA, etc), and have them see if you qualify. Preapproval means NOTHING.
By Anthony Mozelesky,  Thu Sep 22 2011, 17:27
I liked your article, You provide some great info, Thanks
By John Crowe,  Thu Sep 22 2011, 17:55
I think the best advice is to prepare your sellers and buyers before a contract appears in front of them. If you share what's typical, that things often veer off-path and communicate, most deals can be salvaged. The more they know, the easier it is to deal with the challenges that pop-up.

By Ella,  Thu Sep 22 2011, 18:39
the worst is there is no honesty, that must exixt between all sides: seller, buyer, realtor, lenders %, so on....
so many people involved with own drama...
I'm a first time buyer.... look at the houses priced like $350,000 here in California, Mountain View, Sunnyvale.... UGLY!!! UGLY "cardboards"!!
By Ron Bibler,  Thu Sep 22 2011, 19:54
This so wrong. Deborah... look what you did... L.O.L.

Talk about Killing the messanger...

First you blame the Home Inspector... but you don't say how he Killed the deal.

Then then you say first time home buyers are easily frightened. Why is that the Home Inspectors fault?

Realtors... Please don't kill your messangers.. You did ask him to inspect the home. Did you also ask him to shut his mouth and act like its a new home? This is so sad...

By Deborah White, Thu Sep 22 2011, 10:28
home inspections seem to kill alot of deals in West Virginia. First time home buyers are just easily frightened of the least little issue.
By Jeff,  Thu Sep 22 2011, 21:23
This article is laced with inaccuracies like most of Tara-Nicolle Nelson's other pieces. If I wanted reliable advice I would ask anyone but Tara.
By Christopher Spurr,  Thu Sep 22 2011, 22:50
Once again, Tara is on the money. So many "seasoned" agents stray from the basics. Adhering to the basics and following a system gets deals done, plain and simple. Activity, honesty, integrity, and a basic systematic approach will get you to the table time and time again. Anyone who argues with that has obviously never been to McDonald's... :o) Thanks Tara.
By Vimy Nesmith,  Thu Sep 22 2011, 23:50
This is a challenging market, to be sure. Deals are difficult, at every turn. The best advice I can give: put your ego away; it does not serve you well, today. If you're trying to purchase a Short Sale, or should I say, a Long Sale (process takes forever), just accept that you ARE NOT in the driver's seat. Yes, you will jump through hoops. This seems silly, because, well, you are the Buyer, and everyone should be treating you as such--you are the one with the money, right??

But, in the silly world of Short Sales, everything is turned upside down, as you find yourself seated with the Mad Hatter/Seller, who cares only for his time and schedule, and holds little regard for yours. Like Alice, you suddenly find yourself in a world that makes no sense. The Queen/Buyer's Lender, runs amuck threatening, "off with your head" if you don't meet all her demands, and forces you to paint all of the roses red, or else--you won't get your loan! All this while Tweedle Dee and Tweedle Dum/First and Second Lien Holders play their games, figuring out what magic purchase price will make them both happy. The only person having a good time is Cheshire Cat/the Appraiser--who gets paid regardless of the outcome!! No wonder Alice was popping pills!! Her world was crazy, and so is yours, if you're trying to purchase a Short Sale. However, you will persevere, if you are willing to jump through those movable hoops, and, and this is really important, you are not in a hurry. Also, do yourself a favor: don't go falling in love with any one property. If one SS doesn't work out, just move to the next. At some point, the golden "YES" will happen; the bank will accept your offer, if it's decent, and you will finally close on a property. After it's all over, and you are moved into your new home, unpacked, settled in; set the table with your best china, and served your family's favorite meal, you will vaguely remember falling down that crazy rabbit hole, and it will all seem like a bad, distant dream. The End.
By Blue,  Fri Sep 23 2011, 00:23
If it seems too good to be true, it usually is. As a buyer who has been scanning Trulia for months looking for my future home, I fell in love with several homes that looked like great values -- and as it turns out, they were short sales. So they were in fact great values, IF you could manage to buy them. But mostly, they were too good to be true.

Fortunately, my Realtor showed me several homes of the NON-short-sale variety. After an offer-counter-counter-accept, the house is under contract, the inspection has been done and everything looks good, and the appraisal came in at $2K over the agreed upon price! Happy ending coming in October!

The moral of the story? Find a good Realtor who knows his/her own strengths AND weaknesses, and who bolsters those weaknesses by surrounding him/herself with competent go-to people -- like the mortgage broker who got me locked in at under 4%!

The other moral -- skip the short sales. There ARE other houses out there.
By Vimy Nesmith,  Fri Sep 23 2011, 00:37
Great advice, Blue.
By Harvey Heit,  Fri Sep 23 2011, 00:58
I'm very glad you mentioned in your last paragraph the importance of the mortgage broker and real estate broker having a "working relationship"--this is key to all RE transactions not only just shorts.

Great article again Tara--keep more coming. I'm a big fan.

Harvey Heit, MBA & Licensed Real Estate Broker, New York City
By Phillip Torrens,  Fri Sep 23 2011, 05:13
Good and honest replies here.Let's be positive. People can still get mortgages and their are still normal sales happening.... I think with the negative press, good qualified people are afraid to even apply for a Mortgage. Lets stay positive!
By Jim Forbus,  Fri Sep 23 2011, 08:17
In Reno, NV, I've represented both buyers and sellers and have experienced appraisals lower than the purchase price. Yes, it is challenging, but this is when our negotiating skills kick in. The buyers on the bank owned homes and short sale homes did not over pay and purchased with appraisals up to $8k below the purchase price.

On the seller side, my seller acknowledged the appraisal that was $10k below the purchase and we negotiated other items to offset the hit. Only one out of five in the past two years was a deal breaker. The seller refused to budge after the buyer was willing to come up with an additional $6k.

Seek an agent with the negotiating skills and experience in today's market to represent your best interest.
By Karen Weiss,  Fri Sep 23 2011, 08:21
I am a SELLER. Will carry the buyers loan with 20% down in CASPER, WY. Have 122 acre farm, 4bdrm stick house, city water, pond, irrigated hay field, two mobile home rentals for income as well as boarding horses for income. Have 2010 wind generator to help with elec bill. Spent over $6000 in improvements this year. Roof is 2008, carpet through out in 2007. All kitchen appliances stay. Lots of out buildings for poultry and other farm animals. Only 10 miles from City limits. Three realtors gave me their market analyses. Ranging from $100,000 to $50,000 difference. Wonder how that could be??? SO... I paid $3000 for the appraisel so I I would have their opinion. Sale includes all farm irrigation equipment, outdoor arena panels, etc. etc.
Would love feed back. karen12547@yahoo.com
By Rosi Green,  Fri Sep 23 2011, 08:41
Tara - best post I've read in a long time. We handle many, many transactions every week and you are so correct in your points. We've been seeing deals fail due to appraisals in particular. Very sad reality. I also enjoyed that you make not of what people can do to avoid (or soften) the issues. We're doing more searches for comps for BUYERS than ever.
By Barbara Stone,  Fri Sep 23 2011, 08:45
I'm in the early stages of buying a short sale home in Pensacola. When I went to Pensacola it seemed that on every block two or three houses were for sale. although my real estate agent has assured me that everything is "on Track", I'm still scared to death about the horror stories relating to short sales. I don't know how all of this will play out .
By Sarah Cole,  Fri Sep 23 2011, 09:17
We are relocating to NY State and through our house hunt have come across some short sale properties. After being told the wait time, we have begged off any property that is a short sale. We want to be able to move from our home into a new home without a delay. I believe this can still be done and have a great realtor that is working very hard to have it happen.
By Gail Murphy,  Fri Sep 23 2011, 11:39
I wanted a house that was supposedly going into foreclosure.. I offered them a fair market value. They agreed on the price and then I was told it was the banks.. The opposing realtor dragged his feet and the bank was bogged down with a lot of other contracts in foreclosure.. I put down a large down payment $22,000 and kept giving all the paperwork needed .There was 2 extensions and still no settlement. I had made the offer Feb 4th and was still waiting the end of July. I finally decided that there must be a reason for me not getting this house. I told them that July 30th was my cut-off date. I would have to invest approximately $15,000.00 to get it up to VA standards. The Bank still hadn't ok'd it so I pulled out of the contract. My Mother passed away Aug 23rd.. The house did not get sold until Oct. 23rd and for $25,000.00 less than my contract price. I hold the real estate agent not the bank in fault for this loss. I had planned on putting another $50,000.00 more down so maybe that was what killed the deal . Also I am a disabled Vet so they could not charge me all kinds of hidden fees. My agent was great the other people I feel sorry for.
By Brian Petrelli,  Fri Sep 23 2011, 12:52
We've had several issues with appraisals this past month. The best defense is to have a solid list of comps available. Thanks for the article.
By Hueyeats,  Fri Sep 23 2011, 17:28
Great Article and hit so close to home.
We recently bought and had to extend / move our close date for 10 days due to our underwriter needing more & more documents from us. But thankfully (thank god) it all went though (thanks to out mortgage officer & our real estate agent who absolutely rocks!)
The low appraisal price when buying is not necessary a good thing for both parties if you both want to close... because depending on the loans, many banks may not want to lend to a house that is not "worth the value". It will be like higher risk lending where buyer will be underwater immediately thus a higher chance of not getting the debt repaid should anything happens.
It is a great time to buy but you will need to arm yourself with the best agents (always google for reviews) & loan officer who will fight for you in this lending market... it is scary even for a buyer's market, honestly said.
By Carol Gordon,  Fri Sep 23 2011, 20:48
Hi Tara... This is a very informative article. I am learning so much from you. The real estate market is a real challenge for everyone at this time. Everyone needs to work together for the best outcome. This market is so critical for the survival of all concerned. My final thought is that "without people - there is no deal."
By Okay_check,  Fri Sep 23 2011, 22:07
Washington Federal savings was told up front that I did not have a credit score because I paid cash for everything and I did not have a down - it took them 45 days to say I didn't have a credit score and needed $20,000 down. Was I the only one there? why DON'T BANKS LISTEN TO A BUYER INSTEAD OF STICKING THEIR FINGERS IN THEIR EARS AND ONLY HEARING WHAT THEY WANT TO HEAR?
By Aram Arakelyan,  Sat Sep 24 2011, 12:21
Best post I've read in a long time.

Aram Arakelyan
Your LA Broker For Life!
Realty Needs Network
By Blue,  Sat Sep 24 2011, 14:31
Okay_check, were you seriously trying to get a home loan with no credit history AND no down payment?
By Home Selling Consultant,  Sat Sep 24 2011, 15:48
Have several comps to back up the listing price.....make sure they're not far away and are very close in FINISHED square footage.

I interviewed appraisers when I was an active agent and asked how they did their assessments and adjustments. This is very informative when you're searching for comps.

Just don't pull comps from your MLS system. Real estate companies aren't the only ones who sell real estate.
By Nayna Bawa,  Sun Sep 25 2011, 13:52
I was really intrigued to read your blog because it had so many views. A good read but for those who sound frustrated with the situation, please know it is a process. A good realtor will advise any potential buyer/seller of the possible pitfalls including all those that you mentioned. Our duty should be to prepare our principals for the possible hurdles. Yes, things are eventually bound not to follow the perfect course, but that's what makes each situation unique. Communication in my opinion is key to having a beneficial relationship with the client even when it doesn't work out. Thanks for your blog!
By Ruth Zeiss,  Sun Sep 25 2011, 19:03
I agree with the comment about buyers having unreasonable expectations and 1st time homebuyers are the worst. I have a client who just offered $50,000 for a $99,000 move in ready but needs updating house in a neighborhood where even the HUD train wrecks go for upwards of $70,000. When she was rejected and I told her that none of the comps supported such a lowball offer, she had the nerve to ask if I work for the seller.
By Jen Pfeffer,  Sun Sep 25 2011, 21:13
Great insight into the reasoning behind a lot of our headaches! Thanks for sharing!
By Greg Von Herzen,  Mon Sep 26 2011, 12:57
Great info. In my experience deal killers are 1) lender problems (incl appraisal) 2) property inspection and condition problems,...most recently I'm working on a deal where the parcel isn't being assessed as having a house on it. There is a first for everything!
By Eva P. Frank,  Mon Sep 26 2011, 14:04
As one would expect, everyone has an opinion on any subject, therefore I am not surprised by what all have posted. I would like to comment on the subject of appraisals, value and market participants; buyers & sellers, selling & listing agents plus lenders. It seems to me, the selling agent's job is to assist the buyer in finding the home buyers feel is the one best suited for them, educate them about the market, conditions, help then find the right loan person and to do all the right things legaly,ethically and morally to protect them from harm. Then help them buy that home at best price they can. That does not mean encouraging buyers make ridiculous offers and if they insist on it, they need to be educated to be prepared for a reasonable counter offer. If buyers keep running around just throwing low numbers at all sellers, their expectations are not in line with the market and will find the process very frustrating and fruitless as will the agents who choose to work with this type of buyer.
Appraisals are moments of truths. However, one needs to keep in mind the appraisal are done for lender purposes, leveraging their risk. In case of default, what would a typical buyer be willing to pay for such home. That lender is not going to live in that home, has not been out there beating the pavement as the agent with the buyers, looking and selecting the best one for them. Buyer is first of all looking for a home, and then investment. When you show them a home you feel is a good investment, they do not necessarily like it as the home they want to move in to and have a happy life in.
Listing agents job is to get the seller the best price possible, in their desired time frame. Again if the sellers expecttions are not realistic and insist on unrealistic list price, they are not going anywhere either. There have to be reasonable parties to price it within the market range parameters and to be willing to buy within market parameters. As agents to transaction; I do not see why any agent would tell buyers to move on if there is a slight difference in appraisal value and contract price. After all do they want to buy a house of first choice or settle for second choice? It is after all the best house they found, one they chose to make offer on. You can have 3-4 apprailsals and they most likely will vary slightly in their opinion of value. Listing a home should fall in the market value parameters, not be a fantasy. However, again 3 appraisers can have a slightly different opinion of what is the value of that home. Pricing is not exact science and opinions on value differ from seller to buyer, appraisers, lenders and agents. Let the buyer buy the home they love, provided they are able to afford it and let buyers and sellers negotiate with agents assistance and guidance, not undue influence. Agents are not party to the contract. No one has a crystal ball or can predict if the next home the buyer makes offer on will appraise right at contract price, or where the market will be when this buyer is going to sell their home down the road. I encourage all parties to try to work it out, after all the ultimate goal is seller wants to sell, buyers want to buy that house, that is what the offer suggests. Agents have worked hard to get to that point, therefore it makes no sense to me to be telling the buyers and sellers to stick to their guns and don't give in an inch. Each party to transaction needs to feel good about the transaction so agents should be a voice of reason not discourt. We are the professionals, this is what we do every day have the experience that is why they choose to work with us. If no one ever paid over appraised value, I do not see how we would ever see values to increase, since we are always looking in a rear view mirror with sold comps. Yes, there is room for adjustments, to a certain degree, before it would not be considered a good comp. There has never been a better opportunity to buy and even after you showed the buyer ridiculous amount of homes, they have chose the one to make offer on, that is the home they want to buy.
Please help them, with a little give and take it is usually possible.
By Michael A. Daniels, Broker,  Mon Sep 26 2011, 23:05
There should not be an issue with the appraisal because it is the real estate agents job to comp the property before writing the offer. There should also be an understanding that the seller will come down to the appraised value if the appraisal comes in below the purchase price. Many times agents can be in a rush to get a buyer into escrow without doing his or her due diligence. Working with the right mortgage broker is also key, because the mortgage professional should more or less underwrite the loan prior to submission, allowing the real estate agent to foresee any possible transactional red flags.
By Cielo C. Fuentes,  Tue Sep 27 2011, 16:15
I agree. When signing your California Association of Realtor's Residential Purchase Agreement, your agent should be able to point out to you these three important areas in that contract to avoid surprises. As a buyer you must be aware of the contingency periods that cover these three contingency periods: inspection, appraisal and loan. I always discuss with my buyers the importance of these exit points. I rather that my buyers are happy with what they are getting in terms of price, condition and loan.
By Spirit Messingham,  Tue Sep 27 2011, 16:41
As primary a buyers agent, I see the apprasial as the last opportunity for the buyer's. No one wants to overpay in this market, if sellers won't accept the loan contingency, we go back out and start again.
By Leticia Hixson,  Tue Sep 27 2011, 17:19
Great info thanks!
By Trevor Curran,  Wed Sep 28 2011, 07:22

Great post!!! Love IT!!!

Here in NY Metro Region another deal-killer is the attorney who doesn't know real estate. We try to recommend experienced real estate attorneys to Buyers, but sometimes the Buyer uses an attorney with little or no experience in real estate transactions. These attorneys' incompetence either slows the deal down, or worse, kills the deal altogether. Then you get the attorney who thinks he's Perry Mason and that the real estate transaction---an otherwise happy event for all parties involved---should devolve into a nasty adversarial confrontation on issues large and small.

We use attorneys in our market so this is a problem that will continue, basically FOREVER! I've been a Mortgage Banker here in New York for 22 years and this is one of those parts of the real estate deal that just "is what it IS!"

Once again, thanks for a great post!

Trevor Curran NMLS #40140
By Kim Boulter,  Wed Sep 28 2011, 21:56
You're right Tara... Having to wait too long for lenders to get buyers pre qualified AFTER they've already found the home they want has ruined a few potential deals for me lately. It is so important for buyers to have their financing in order BEFORE shopping for a home, so that when you find the right one, you can move forward on it, leaving no room for anyone else to slip in and steal the property right out from under your nose!
By Heather Wright,  Thu Sep 29 2011, 12:07
Great info! Thanks. I find myself biting my nails until I get the appraisal results back. Thats a big deal killer!
By Heather Wright,  Thu Sep 29 2011, 12:07
Great info! Thanks. I find myself biting my nails until I get the appraisal results back. Thats a big deal killer!
By John Austin,  Thu Sep 29 2011, 13:10
went to the northern panhandle of WV to look at short sales or forclosed homes and all the agents I talked to would not help me with bank owned or govt owned homes, said it takes to long and to much trouble called a few agents in Ohio and same thing. Most of the homes in WV that we looked at were very distressed and cheap(between $12000 and $40000) We are going to pay cash(if and when we sell our house in SC) WE won,t need an appraisal. but the bank are really tight about lending money its really hard to sell here in SC there are so many forclosed houses dirt cheap but need thousands of dollars just to be livable/ We are retired and want to move back home and this realestate market is now a REAL headache and its the bank fault for lending money to anyone for anything and now we are payiong the price.
By Debbie Ingram,  Thu Sep 29 2011, 15:27
The Appraisal hurdle is the biggest of them all.

The stringent rules that appraisers must now use, put in place from the government , have completely made selling homes so much harder than it needs to be.

Once again government gets in the middle of private sector business and muddles up things up.
By Debbie Ingram,  Thu Sep 29 2011, 15:28
The Appraisal hurdle is the biggest of them all.

The stringent rules that appraisers must now use, put in place from the government , have completely made selling homes so much harder than it needs to be.

Once again government gets in the middle of private sector business and muddles up things up.
By Heather York,  Mon Oct 3 2011, 07:34
Unfortunatley, a large amount of homeowners believe their homes are worth more than the comps support. This has been one of the major problems with low appraisals.
By DeeDee Riley,  Mon Oct 3 2011, 23:42
I think this is an excellent article Tara! I am seeing these things happen in our area of Sacramento. Seems the banks don't want to give loan approval till the end. And I agree with Kevin Olson & Jessica Laude about the appraisers getting paid to go back and check on something they found wrong. And buyers end up paying for it. Seems wrong.
By Lisa and Goran Forss (Broker),  Thu Oct 6 2011, 14:42
Waiting for the appraisal...
It goes both ways. We have bank listings where the appraiser came in javascript:submit_voices_form('post_comment_form');way too high and the bank property then has to sit until it comes back to a reasonable level. We also have regular sales in turnkey condition where we're concerned the appraiser disregard condition and amenities - which is likely to be a deal killer. Most of the time it works out just fine.
By Ruth & Perry Mistry,  Thu Oct 6 2011, 15:04
Great blog Tara.

By Yvonne C. Burdette,  Tue Oct 11 2011, 14:47
Our job as Agents is to educated the buyers and sellers, and help them buy the house, not loose it, and sell the house and not keep it! Due dilgence in pricing, pre-inspections, picking a local lender, all on my TO DO LIST to get the Contract to Closing!
By Deborah Griffin,  Wed Oct 12 2011, 07:17
Thanks for sharing.
By Mo A. Hashem,  Mon Oct 17 2011, 12:53
Good info, thanks for sharing
By Wes Black,  Mon Oct 17 2011, 20:42
Thank you for the great overview. I am most discouraged by the total time it takes for the entire closing process. In Louisville, we can usually get a home inspection within a couple of days and have the report same day. It sometimes seems banks just do not show any real interest or sense of urgency. This is probably a culture thing like when magazines used to tell you it will take 6-8 weeks to change your address on your subscription.
By Anita Zelda Freud,  Mon Oct 24 2011, 11:59
very interesting post!
By Patti Chapman,  Wed Jan 4 2012, 19:00
Thank you for your overview ~ lots of good information from the blog and the commentaries.
By Voices Member,  Fri May 31 2013, 13:46
I always love your writing but this one is quite exceptional! I will continue to read!

David | http://www.professionalsiding.com/windows.php

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