Normally the appraisal or BPO would have been done previous to then bank accepting the offer so that is high suspect. With that being said, if you read the banks contract's carefully you will probrably find that their contracts are very one sided and they can do anything they want including drop your contract and go after another offer. Almost all of their contracts state that, so be very careful with the bank contracts and try to close as soon as possible so they don't excersice any of the crazy clauses they have.
Javier Olmedo, ABR, GRI
Florida Realty of Miami
Lender would all ready know value of home prior authorize seller for a short sale.
However lender would not know what appraised value would be those are your lender records.
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A short sale, as you know, is when the owner owes more on the mortgage than the home is worth. The house is listed for sale at a price that SHOULD be fair market value. When an offer is tendered, the bank is going to research that offer by obtaining Broker Price Opinions (BPO's) from local Realtors, and sometimes an appraisal. If the price indicated by either or both of these options is higher than the offer price - meaning that the fair market value is higher than is being offered, then the bank will counter at a higher price to raise their net for the property. Having said that, I will also say the following: If the appraisal does not truly reflect market value - not an uncommon occurrence - then your Realtor should be able to challenge the value.
I am going to be honest and say I am not 100% sure, but I believe the bank can do whatever they wish within the language of the contract written. Since I have not seen the contract I cannot say for sure.
The short sale itself means that the bank is taking less than what is owed on the note. When an offer is submitted they generally have to have all of the paperwork in order for the owner asking for the short sale and then the financing in place for the new buyer.
So, yes I am going to say that the bank holds all of the cards, and the value of a property may be higher than the original agreed upon price. If you did not receive a signed letter of acceptance FROM THE BANK, it was not a signed contract. You may have a signed contract by the ower saying they are going to submit the offer to the bank, that is only the first step.
The final acceptance of contract is from the bank and that may be where you are seeing a counter-offer from the bank based on their appraisal.
It is hightly reccomended that you have an attorney helping you with a short sale because of the details involved.
I hope that helps and good luck,
South Florida Brokers
On Your Team. http://www.irenapopilevsky.com