Hi Alicia,

Ah! It's not YOUR bank that's looking to appraise but the Seller's Bank, right? Ok - then this is a Short Sale - you should be aware of this and apparently your agent is not doing a good job of providing you with advise (it may well be his/her first one of this type).

Yes this is legal. You are actually NOT really buying it from the seller - you are really buying it from his bank. Yes the seller needs to sign too but the decision isn't his. The seller is practically in foreclosure right now.

Isn't your agent helping you? I'm concerned. Is your agent also the listing agent?

Oh yeah ... and since your agent isn't telling you what's going on ... a Short Sale is usually anything other than short. You will be VERY LUCKY to get a response from them in 16 business days. I hope that your offer is AT LEAST 10% under market (better yet 20% under market). Otherwise, it is not worth your time to get a short sale - and you should walk away.

Jeff

Alicia - As a Certified Distressed Property Expert or CDPE I assist buers and sellers through the foreclosure, short sale process with the goal of helping both buyers and sellers understand how this process works.

You describe a Short Sale scenario but without a CDPE your seller/owner is not going to get very quick results and most of the time the deal will NOT work out due to buyers and/or sellers lack of knowledge on how to proceed, who to contact, what forms and documentation is needed.

For example when a Short Sale is negotiated submission of (usually) over 100 pages of documentation is needed in order to get the bank to 'sign off' on the short sale.

The bank is your scenario is quite within it's rights and pwers to order a BPO (Broker Price opinion) or PCR (Property Condition Repot) from a reputable REO/BPO agent, of which I am also experienced.

Please contact me directly for any questions or, if you prefer, add your comments to this post so everyone can learn more about Short Sales etc...

Alicia,

This is a short sale. The owner negotiates the sale price and conditions then submits it to the bank for approval. What they are doing now is called a BPA. It is an appraisal from the bank to make sure that the bank can't get more money for the house. Basically they want to see if a short sale is the best possible solution for them. Because the owner owes more money on the house than what it is worth. Your realtor should have submitted a short sale addendum to the agreement of sale. Did he or she do this? Feel free to contact me if you have any questions.

Sean LaSalle

If the home is being sold for less than what is owed, it can be a long battle - or a short sale. The lender will accept the money owed to them and any attorney fees. A payoff will show this. However, if the home is being sold for less than what the sellers owe, you may have a tougher time of doing anything. Whatever you do, do not do inspections or an appraisal until this lender accepts the offer. The timeframes are not inot effect on the AOS with a short sale, until the lender says they approve your offer. Regardless of what the sellers accept, it is really what the lender decides on. (if they are getting less than what is owed) That is what you need to find out.

Alicia, Durenda (what a lovely name!) is correctomundo! 16 Days? Right! I don't wish to sound like a cynic but that time frame sounds like fairytale land. But, it all depends if you are dealing with a Seller who has ONE loan or TWO! And who the lender is. We took a poll the other day at our weekly Realtor meeting and I was pleasantly surprised to find some of my brethren actually closed deals in 3 to 4 weeks with the scenario you describe above which is a "Short-Sale" as Durenda aptly identified. BUT!! I've been in escrow with some companies for 3-5 months!!
This question is very common here on Trulia. I'd go through some of the "archives" and you'll see many "threads" revolving around the issue of "Short-Sales". Good luck! Appraisals are standard in this situation for not only YOUR NEW LOAN but also for the bank you now find yourself dealing with!
Go find a motivated Seller who does NOT have any equity issues!

This sounds as though the sale may be a short sale.
If it is, the seller probably owes more on the house than the contract price.
In a short sale situation, it is common for the seller's lender to order at least one appraisal.