To read your questions i can understand , you have many things to know about reverse mortgage. I have a reverse mortgage which name is reverse mortgage lenders direct .I think you get your right answer from their.
1. Hire an experienced agent/broker, they will be able to explain the process in details.
2. Listing agent is correct, house needs to sell at the list value, there is no negotiation at this point.
3. Reverse mortgage foreclosure does not work the same way as regular foreclosure and the rules of regular foreclosure do not apply in this case. So writing an offer below the list price is a waste of time and experienced buyer agent would tell you that right away.
4. Appraisers are almost always s wrong, and most of the time they do not take repairs into calculations, I can explain why and what is behind (HUD, FHA, FANNIE, insurance rules, etc) but just take my word for it, they do what they are told and the result is incorrect.
5. Lenders know that appraisals are not correct and order new appraisal every 90 days (sometimes every 120 days), so the price will go down eventually.
6. If you work with an experienced broker who is able to follow the property and catch the price change, you have a better chance of grabbing it before investor comes alone and snags it from you.
They base their appraisal on the home, on comps, and the condition. You'd be surprised how accurate the appraisers are with their estimates and listing price. Someone will pay it eventually -- our available on market inventory is VERY low. Just yesterday, I had one of my listings in Dearborn Heights get 20 offers -- yes 20 and is under contract for $17,000 more than the asking price. Yet, if you watch TV, you'd think this was the worst market ever.
If the home hasn't sold yet, it's likely due to some damage done AFTER the appraisal due to break-in, deterioration, etc.
Unfortunately, there is no way you can get the bank to take less than their asking that I am aware of. That's why reverse mortgages are risky (and in my opinion bad) products for lenders.
When a homeowner reaches 62 yrs. old and has lived in the home for decades, in most cases the house has earned plenty of equity (meaning it can sell for a lot more than what the owner paid for it.). If the owner is on a fixed income (Social Security for example) or needs more cash to pay their monthly bills, the owner can apply for a reverse mortgage. The lender will use the large equity in the home as collateral for the loan. When the owner dies or sells the house, the loan is paid back from the estate of the deceased or from the sale of the home.
However, in some cases if there is no family members who can sell the house or be in charge to pay back the loan, the bank or lender will foreclose on the property because technically the home was used as collateral for the loan. At this point, the lender doesn't care what the appraisal is or what condition the home is in. They just want the money owed on the reverse mortgage loan. If the balance of the loan is more than the value of the house, don't expect the lender to lower the asking price and feel sorry for you. The lender still wants the money. You are not forced to buy it either. Therefore, expect the lender to wait a few years before lowering the asking price.
This means that when the person either moves to a nursing home or is deceased, the amount of the reverse mortgage must either be paid by any family members who would wish to keep the property or the property must be marketed for sale and the proceeds to cover the reverse mortgage must be paid to the lender and if there is any excess, it would remain with the family member who sold it. If neither of these happen, the lender forecloses on the property and the reverse mortgage foreclosure process starts.
The appraisers in many cases are very accurate, and in others they are not. Most do consider repairs and use comparable properties in the market just as a Realtor would do for a market analysis. If the market is good, they may value it higher then it may actually sale for as many people see foreclosure and look for a deal. The listing agent should take lower offers even though they will be countered at full price. The lower offers will help to get the value lowered later in the marketing period.
"2) After notifying the Secretary, and receiving approval of the Secretary when needed, the mortgagee shall notify the mortgagor that the mortgage is due and payable, unless the mortgage is due and payable by reason of the mortgagor's death. The mortgagee shall require the mortgagor to (i) pay the mortgage balance, including any accrued interest and MIP, in full; (ii) sell the property for at least 95% of the appraised value as determined under ? 206.125(b), with the net proceeds of the sale to be applied towards the mortgage balance; or (iii) provide the mortgagee with a deed in lieu of foreclosure. The mortgagor shall have 30 days in which to comply with the preceding sentence, or correct the matter which resulted in the mortgage coming due and payable, before a foreclosure proceeding is begun."
You can read the whole law here:
In terms of your good questions, it is government regulation, not exactly paragons of excellence.
Jim, American Bank
If you are serious about purchasing the property work with a Buyers Agent who will help you through the process of buying a home. They will help you each step of the way. Unless you do this for a living don't try to figure it out on your own.