Any property, whether an REO or not, that had an FHA appraisal completed on it will have the appraisal connected to that property for 6 months. This is due to the FHA case # that is assigned to the property at the time the loan was started.

For example: If the first FHA buyer walks because the appraised value comes in lower than the purchase price (common right now) and the seller will not lower the price to meet the appraised value, then the seller will not be able to have another FHA buyer offer on the property without facing the same value issues. That is why many sellers will accept a conventional loan or cash buyer over an FHA buyer simply due to this risk. The buyer can pay the difference between the purchase price and appraised value, but the funds must be from their own pocket and not gifted or borrowed. Many of the FHA buyers are first time home buyers and do not want to "over-pay" or do not have the funds to do so.

Please let me know if I may be of any further assistance,

Mary Preheim
marypreheim@realtyexecutives.com