Home Buying in Dallas>Question Details

ca_lexa, Home Buyer in Boca Raton, FL

Appraisal came in much lower and Fannie Mae rejected appraisal offer. What can be done at this point, if anything?

Asked by ca_lexa, Boca Raton, FL Tue Aug 20, 2013

Ok, so I initially offered the full list price on a property at $160K, however, the appraisal came in at $142K. So we re-offered at appraisal value. I was told today by my realtor that Fannie Mae rejected our new offer. My realtor advised we sign the termination letter (to cancel and get my deposit back), then as soon as the property hits the market, resubmit the offer at $142K and include the appraisal as backup documentation. Is this the best course of action for giving this another shot? I'd like to get this property for what it appraises for.

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9
Sounds like a good strategy.....what does your realtor think it is worth? Do you think the appraisal is right or wrong? What do you think of the price vs other homes you saw?
1 vote Thank Flag Link Tue Aug 20, 2013
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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You should be talking with your Realtor only and not us.
0 votes Thank Flag Link Thu Aug 22, 2013
I worked a deal this past spring with Fannie Mae on something very similar to this. We escalated to the very top, me and my buyers lender. Unfortunately, all they said they would do was stick by their listing agents BPO, and if the buyer wanted the home, then they would have to use Homepath Financing b/c they already had an appraisal in place for the list price or pay cash :(

Good Luck.

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Erica Texada, Broker Associate, CDPE , SFR
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0 votes Thank Flag Link Wed Aug 21, 2013
I agree with Nadine below, if you want to get this property for what it appraises for then your option will be having your agent work with higher level at Fannie Mae. If you really want this property then you can either order another appraisal or pay for the difference, which is $18k.

Good luck!
Susie Kay, Realtor®
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Residential/Commercial/Investment
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Dallas, TX 78240
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0 votes Thank Flag Link Wed Aug 21, 2013
I am sorry to read of your experience and will say it is sounding unusal in that when you need a mortgage to buy a home, the lender will order an appraisal. The appraisal must come in at the purchase price (not the mortgage amount)..there is always debate on this, and it may vary state to state I suppose. This is the number one reason why it is vital to look at strong comparables of sale prices in your marketplace when listing, and taking activity into account when pricing a home because ultimately an offer will be accepted and if the buyer needs a mortgage as you do, the home must appraise. The only time the appraisal isn't an issue is when the offer is a cash offer. The buyer can order an appraisal for peace-of-mind yet nothing hinges on the appraisal to get to closing unless the buyer/seller agree an appraisal expectations..

SO WHAT TO DO: My recommendation is to have your agent pull comps him/herself to challenge the low appraisal. Often lenders order appraisals and the appraiser selected isn't familiar with the local market. Happens most often with brandname lenders/big banks.. not being familiar with a local market can cause an appraiser to be 100% black/white and not take certain factors into account that could sway appraisal value upwards: in good example, if the property received multiple offers, and offers are perhaps higher than your (back-up offers in hand). This shows the appraiser what the market is ready/willing to pay for the property. This is the case is hot markets such as Dallas.

When an appraisal comes in low, the lender won't make the loan unless the seller comes down in price, the buyer comes up with the differential or the seller/buyer meet in the middle re price.. Without your financing which is in the contract, you automatically get your earnest money back. The only time you risk losing it is when your lender approves the mortgage and you terminate the contract...or in cases where there are option periods, when past the option period to terminate..

As for coming back with a $142K offer knowing appraisal, you say Fannie Mae rejected offer.. the home is ON the market regardless of where you are in the contract process. Something isn't right with the overall understanding of the game in play. How many days has this home been on the market? As for getting the home for what it appraised for, that is purely dependent on who owns it. A seller could refuse to sell FHA / VA and look only for Conventional financing or cash offers. Appraisals still rule the process when financing is required. A cash buyer could offer $142K, $155K even offer cash over the list price and be the stronger suit to buy the property.

Signing a termination letter is the correct procedure for ending your interest in the property all together, and without financing, your earnest money will be returned to you.

Wish you all the very best
RoseMarie LaCoursiere, REALTOR
rosemarie@ebby.com
0 votes Thank Flag Link Wed Aug 21, 2013
Hi Ca,

You can also order another appraisal to see if it will apprise higher as well.

Dixon
Realtor
http://www.findyourtexashome.com
0 votes Thank Flag Link Wed Aug 21, 2013
Your Realtor needs to escalate the issue to higher level at Fannie Mae. Re-offering on the property may not be the right strategy since this is a Fannie Mae REO. The Asset Manager may have a back up offer that is using Fannie Mae's HomePath financing, which requires no appraisal.

Nadine Cius
Realty Icons
2425 West Loop South, Ste. 200
Houston, Texas 77027
mailto:Nadine@RealtyIcons.com http://www.RealtyIcons.com http://www.RetireinHoustonTx.com
http://blogs.har.com/RealtyIcons
Direct: 713-412-0217
Fax: 281-500-4067
Your One Stop Real Estate Consultant Group!
0 votes Thank Flag Link Wed Aug 21, 2013
Re-offer what they refused(142)...... You and your realtor are dealing with an idiot......
0 votes Thank Flag Link Tue Aug 20, 2013
if you have agent.. Have your agent to go back to the seller agent to make offer off the appraise value
or come up with the difference $18000.00
0 votes Thank Flag Link Tue Aug 20, 2013
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