Home Buying in 33559>Question Details

magnus, Home Buyer in

House was listed for $120.000, now, after 2 months of waiting the bank wants $134.000 as a minimum. What should I do?

Asked by magnus, Sat Dec 1, 2012

The appraisal was made late: 20 Nov, they don't want to tell me for how much though. It's a 3/2/2/pool/1981/0.24acre/hobby room/on suburbs/old amenites and some TLC needed. Why it took so long and why the price went so high out of the blue? Is it normal? It is a Short Sale FHA. Ah, and on Wed they gave me 72hours for response.
PS. The contract states "if not signed by buyer and seller (...) on or before Oct 12, this offer shall be deemed withdrawn (...)" - Like I said nothing happened since I've signed the contract on 2nd Oct. What kind of game is that? Thank you.

Help the community by answering this question:


Your agent should have warned you that the listed price in a Short-Sale is not an approved selling price by the third party, and that frequently when the offer comes back it will be at a higher price. If they didn't, I would look for another agent with more experience.

What you described is normal when purchasing short-sales. If you don't think the home is worth 134K then move on and don't waist time finding another home...prices are going up.
1 vote Thank Flag Link Sun Dec 2, 2012
Yes, this is a commonly misunderstood real estate concept. Assessed value is merely a number assigned by the department of taxaction strictly for the purpose of determining a tax rate. The assessed value has nothing to do with the actual sale value of a property and is generally lower than the home's sale value.
1 vote Thank Flag Link Sat Dec 1, 2012
Are you paying ALL CASH? I have seen some less than ethical listing Realtors and investors engage in fraudulent Flipping of Short Sales and this could be what is going on...

Did you receive a copy of the Short Sale approval letter from the lender that lists your name as the buyer and the price?

It happens sometimes that the required price can change. So yes, although it was previously approved at $120k the latest appraisal may require the sale at $134k.

Most short sales will allow up to 3% towards the buyer's closing costs (unless it's a cash transaction) so you might tell your Realtor that you want some of your closing costs paid.

The Seller may simply refuse and may be able to cancel your contract and immediately sell to another buyer willing to pay the $134k, though.

Good luck!

All the best,

PS If you are paying ALL CASH make sure you hire an attorney to review the paperwork and title insurance policy since you will not have a lender's underwriter protecting your interests.
0 votes Thank Flag Link Thu Dec 6, 2012
Thank you for all your responses. There's another thing I remembered: this house when was listed online for sell had in its info "bank approved for $120.000" until it went on contract with us. Is that the NET they were referring to? And as I remember the house was listed around June for $125k at the beginning and dropped the price around July-August for $5k.
Plus another thing: our agent still doesn't know the appraisal price which bank made. Does it really work that way? Thank you. You are very helpful and any comment will be appreciated, I'm just curious of all process and need a second opinion.
0 votes Thank Flag Link Wed Dec 5, 2012
As Kevin indicated, you need to be huddled up with your agent. This is the time for you to sort your priorities.

Bill and Alma provided a real look at what the JMV on the tax records means. You MUST take this JMV data and with our agent analyze the trend. Some trends ARE NOT +15%. Further data mining will allow you to forecast what the short term consequence will be. Then you can decide, "Do you want the house?" "Are you left with sufficient head room?" "Are you working with a recommended lender?" Your lender can be your Achilles heel. After all this time. don't let a lender with alternative objectives end up wasting all your time and effort.

As Kevin stated, You hired a consultant. That is to whom you should be turning. Soliciting opinions off the internet rarely ends well.

Best of success to you an buying your new home.
0 votes Thank Flag Link Sun Dec 2, 2012
If you have a buyer agent, you should be listening to him/her, if not shame on you. Thats what we do, and earn our living by. If your looking for free advice here, some may give it to you, but they undermind our profession by doing so.

Shame on all the agents that answered this question. They obviously do not value their time, investment in their profession or future means of earning a living.

Kevin Cloutier, REALTOR
0 votes Thank Flag Link Sat Dec 1, 2012
Generally speaking in Hillsborough County the Property Appraiser's value runs about 80% of market value. It's a ballpark figure so if the property has a Property Appraiser's value of $113k that would translate to 80% of about $140k. Your Realtor can send you the recent sales of similar homes to see what kind of "deal" you are getting.

Most buyers don't realize that the listing price on a Short Sale is purely ficticious until/if the Seller is approved for a Short Sale AND the lender does their appraisal (or BPOs) to determine current market value. I see some absurdly high "required" prices because the BPO Realtors may not have a clue (and shouldn't be expected to have a clue for the $50 they're getting paid!) and may use comps that are not even close to being comparable.

So unless you decide to go forward at the "approved" price, the listing agent should immediately offer it to sell to another buyer who may surely step in your shows with the very low inventory of "truly" available properties (excluding ficticious short sale listings).

Hope this helps.

All the best,
Alma Rose Kee, PA
Future Home Realty
0 votes Thank Flag Link Sat Dec 1, 2012
Mortgage Broker responds

If you need a loan to purchase, you don't need to worry as all lenders require an appraisal and the appraisals are usually conservative these days.

Just make sure you have a legit pre-approval and strong Good Faith Deposit moving forward, not just some WEAK $1,000, but something that says you're serious and separates you from the rest of the pack of buyers!

I can pre-qualify you over the weekend, send you a letter and you'll be ready for action!

Go to http://www.pro-option.com ,pick a program and call me today

0 votes Thank Flag Link Sat Dec 1, 2012
Hi Porkka,

Are you getting a mortgage or paying cash for the house? If you are getting a mortgage your lender will do another full appraisal before they lend the money. If your lender's appraisal does not match what the seller's bank said you should have the option to cancel the contract or renegotiate with the seller's bank. You can also make a counter offer to the banks price.

Good luck,I hope you get your house.
0 votes Thank Flag Link Sat Dec 1, 2012
Dear Porkka,

All that is important is the true current market value of the property and what you are willing to pay for it subject to the appraised valuation. Banks are increasing list prices and counter-offers on short sales above market value so be careful. This is especially true with Fannie Mae properties where they tout their HomePath financing which does not require an appraisal.

With inventory levels shrinking dramatically there are fewer options for buyers, especially in the lower price categories and pricing pressure is to the upside. The market in northern Palm Beach County has stagnated a bit over the past couple months and inventory is certainly one of the culprits.

You need to do a thorough analysis of the most comparable sales that have closed over the past 90 days and do not be afraid to counter offer the banks latest counter but be prepared to back that number up with sound analysis that the asset manager will look over. The valuation of the property by your county appraiser is not the same as market value and there can be a large variation between the two numbers. One thing I always do when doing a valuation analysis is look at the percentage of county valuation the most recent comparable sales sold for as this gives you another bit of information that can be critical.

Do not make the same mistake that many buyers do and assume because you are bidding on a foreclosure or short sale that you are getting a "deal" as many times you are paying too much. More often than not when you take everything into consideration (do not forget the TLC you are referring to) I see the best opportunities in well cared for traditional sales with a motivated seller on the other side of the table.

Never has it been more important to have a qualifies agent on your team looking out for your best interests and keeping you immediately notified of the new opportunities that hit the market. Buyers have to be able to act quickly and make immediate decisions as the best deal will be gone in days, if not hours.

Best of luck and if I can offer anything additional I am a call or an e-mail away.

Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
0 votes Thank Flag Link Sat Dec 1, 2012
Unfortunately this is the price. With FHA short sales they can be pre-approved and the valuations are not easily disputed because they are full appraisals. My last one I tried to get a reduction for the listing price they came down 2k only after no offers in 2 months. FHA regulations control the short sale process, the bank and the owner have little to say on price or process. My question to you is if this house is gone tomorrow does that make you upset and sad? If yes then take the bank price. If no then move on.
0 votes Thank Flag Link Sat Dec 1, 2012
The only thing that doesn’t sound normal is that you got an answer on a short sale and how fast you received it; the seller must have a very good Realtor. Sign asap if you want the house and can afford it. Good luck,

Jim Simms
NMLS # 6395
Financing Kentucky One Home at a Time
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Sat Dec 1, 2012
Thank you for your responses, I got another and last question:
does the house value on a county website mean something? This house's value is $113k which in my opinion is pretty good in comparison with other houses' listed prices / county value.
What is Your opinion on that one? Thank You in advance.
0 votes Thank Flag Link Sat Dec 1, 2012

Its the house you want, then jump on it before you lose it to another buyer!

See the 3% and 5% down with NO PMI programs here. http://www.pro-option.com

0 votes Thank Flag Link Sat Dec 1, 2012
This is absolutely normal for short sales. The banks are the ones in charge and they can do what they want. I have been through this many times the banks do not change their mind. You have to decide with the help of your agent if $134k is still a good deal for the house. If it is move forward and be happy you got a good deal. I had a buyer wait over a year for a short sale and the bank came back 30k higher. He was still getting a good deal and moved forward.

Best of luck,
0 votes Thank Flag Link Sat Dec 1, 2012
Porrka, it sounds pretty normal. I see you having two options - accept the banks price, or walk away. You should discuss the pros and cons of this with your agent.
0 votes Thank Flag Link Sat Dec 1, 2012
Thank you, Mrs Ryan, for your response. What I didn't mention is that we put a counter offer for $128.500, but I don't think it would help, especially when the bank set its minimum already. What surprised me is the fact that after 2 months they changed the price I wasn't prepare for.
Btw, can You please tell me if the house value on a county website means something? This house's value is $113k which in my opinion is pretty good in comparison with other houses' listed prices / county value. What is Your opinion on that one? Thank You in advance.
Flag Sat Dec 1, 2012
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