Home Buying in 48206>Question Details

M. Cox, Home Buyer in Detroit, MI

Home was listed as short sale approved, now the short sale bank has countered my offer for more than I can afford and we have paid for inspection

Asked by M. Cox, Detroit, MI Fri Dec 7, 2012

and appraisal. Can we recoup the fees from the listing agent

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Answers

9
There are very few circumstances where you're able to get a refund on an appraisal and/or private home inspection.

Sometimes your lender will give you a credit for the next appraisal, but you'll have to talk to them about that.
0 votes Thank Flag Link Wed Dec 26, 2012
Could be that a short sale was approved based on the fact that the owner qualified for a short sale. When a contract is written on a short sale listed home, not only does the terms of the contract have to be accepted by the seller's lender but the actual seller of the home has to often qualify to even be granted a short sale. It is interesting how each area has a different method. We normally do inspections and appraisals after acceptance since it could take 3 to six months to close and the condition of the property could change. Sometimes, a buyer will go in and do a termite moisture inspection early or a 'mini inspection' and reserve the right to do the full inspection and right to terminate after acceptance by the bank on all terms.

If a listing says 'short sale approved' here, i don't assume that anything is written in stone - i just assume that the seller has received approval to participate in a short sale.
0 votes Thank Flag Link Sat Dec 8, 2012
Quick clarification..I am licensed in the state of Michigan and I just responded from my Florida Trulia account below....same person
0 votes Thank Flag Link Sat Dec 8, 2012
I wanted to follow up after reading John's response. He has given the impression that you should not have had an inspection at the time you did. Real estate is practiced differently in each state, just as the laws vary from state to state, real estate and otherwise. In Michigan, it would be rare if the buyer did not have an inspection completed within 7-10 days of an accepted Purchase Agreement. As a licensed Associate Broker also in Florida, it is just the opposite, the buyer does the inspection when they are informed the seller's lender approved the short sale.

My opinion is, the inspection should be completed at the beginning. Even from the buyer's perspective, I would rather be out inspection money rather than wait 3-4 months, have the inspection, only to find out their is a material defect that causes dissatisfaction.

In today's market, I would not want to wait 3-4 months to get back into the market if I were a buyer. Rates and prices are subject to change. So, why add more risk to the equation.
0 votes Thank Flag Link Sat Dec 8, 2012
We have no idea why you had inspections performed before you received an approval for the short sale bank. What has happened to you is the very reason that the approval must be received first and money spent on approvals later.

Again, we don’t know the details of your specific situation.

Talk to your agent about the wisdom and risk of having the inspection done. Perhaps a chat with his broker is also needed. If the agent and broker expect to eventually earn a commission for helping you to buy a house, maybe they need to step up and…
0 votes Thank Flag Link Fri Dec 7, 2012
Talk to your agent . Has your agent prepared a market analysis to justify your offer? Counter back at an amount just over your original offer. Prepare a letter explaining why you offered this price. Don't give up.
0 votes Thank Flag Link Fri Dec 7, 2012
Discuss this with your agent. You can counter offer the banks counter offer so things may still work out for you. If not, sorry but you are out the cost of the inspection :(
0 votes Thank Flag Link Fri Dec 7, 2012
Good answer from Derek already. It is possible that the listing agent was given a sales price from the seller's lender that was acceptable previously. However, if a significant amount of time had passed since receiving that, the bank often updates a broker price opinion. Since there have been certain locations and price points that have increased, the market value may have increased since the date of the first broker price opinion.

As mentioned, short sales do lend risk of money spent without certainty that the price or seller will be approved for the short sale. There are just more factors involved in this type of transaction. Buyers, in most cases, pay for an inspection and that contingency satisfied. Some buyers do not have the home appraised until the seller has provided notice that the short sale has been approved. However, depending on the type of financing, delaying the order of the appraisal may not be possible since the time frame to close a short sale once it is approved.

One final note, you did not indicate if your inability to increase your offer was presented to the seller's lender. Before seeking to recoup fees, be sure that your position has been presented in hopes your original offer could be approved.

Best of Luck in resolving your situation.
0 votes Thank Flag Link Fri Dec 7, 2012
There are very few scenarios where a short sale is approved prior to securing a buyer. I see properties positioned that way quite often, and even showed one today that claimed to be exactly that ... but the long and short of it is it probably is not the case. I explained that to my clients today that it does not necessarily mean a thing.

I won't comment on the rest of your question, as it is up to you and the agent how you all want to handle that, if at all. There is always a risk in pursuing a short sale including out-of-pocket expenses. Hopefully you can get it resolved.

Good luck.
0 votes Thank Flag Link Fri Dec 7, 2012
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