Home Buying in Temecula>Question Details

Diamond82, Home Buyer in East Point, GA

I have contract on a homepath property the lender appraisal is lower than the asking price will homepath lower the price so we can close

Asked by Diamond82, East Point, GA Sat Jun 30, 2012

I was due to close July 5th everything was good to go we were just waiting on the lender appraisal. I do have a contengentcy clause in my contract that the sells completion is contengent on the appraisal I don't want to walk away and I'm paying my own closing the home is an "as is " sale. The appraisal is way lower than the asking

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Diamond82’s answer
Thank you Jill and Chris, I got a lot of good information from this bog but I did a lot of research on my own and my realtor was aswome. He did his homeowrk ahead of time and he knew the comps supported the value and that the apprisal would come back low so he was already prepaired to advocate for me. I am so excited after being out bid on a number of fannie mae homes some in the same area and they all sold less than the asking price. I think whoever fannie mae uses to list thier homes should do a better job however when biding wars start homes are bound to be contracted for more than a house is worth, they may need to look into how to better market and choose a 'higest best" that will be closer to the homes value because the apprisal is going to be the last deciding factor on a financed sale. I would never have done a homepath loan even though it was an option becuase they do not require an apprisal and i did not want the risk of buying a home with negative equity right off the bat. Their incentives seek good becuase they know you are overpaying for a house so it cost them nothing to pay closing. Buyers my suggestion is don't be fooled by what seems like a good deal they know how to play with our emotions and they know this is the time most of us who were unable to get in the market a few years ago are desprate to get in now.
1 vote Thank Flag Link Sun Jul 8, 2012
I just went through this, and was chosen highest and best - conventional! Hoping to get a low appraisal to get the fair price. Had to offer way more than true value, just to get it with this crazy market. My home is about 60,000 less than the offer I put. Homes in Southern California are selling 60 grand higher than asking, with people paying over appraisal -cash! Hoping to actually beat the crazy market and greedy sellers with this strategy. Fingers crossed :)
Flag Thu Feb 21, 2013
Just wanted to give a follow up. Fannie Mae did lower my sale price to the apprised value and I am closing July 13th my home is 12,000 less than the asking price.
2 votes Thank Flag Link Sat Jul 7, 2012
I would like to think that all banks would come down to the appraisal amount so that you can close, but you never know. Logic goes out the window sometimes with the banks. I'm glad it worked out for you.
1 vote Thank Flag Link Sat Jul 7, 2012
Congrats Diamond82. I'm glad it all worked out for you.
1 vote Thank Flag Link Thu Jul 5, 2012
thank you Greg, I agree about the Homepath loan I did my research before deciding on conventional I was not will to risk not having an appraisal and ending up going into a home with a huge amount of negattive equity. Plus I did not like the fact they would add a clause to allow me to back out if I paid for an appraisal and discovered I was over paying for house with a low value. Not worth the incentives. My seller is not paying for closing cost or any other concessions so lowering the price to its value made since to them like I said all 6 comps in the area (less than a mile) in the last 3-6 months sold for under 60, 000 except for one that sold in March for 68,000 they could not dispute the value and they didn't want to risk a new buyer having the same results or maybe even a lower appraisal.
1 vote Thank Flag Link Sat Jun 30, 2012
My agent has already worked it out the seller accepted the appraised value and the price has been adjusted to reflect the new sale price. It is NOT a Homepath loan its a conventional loan on a forecloused house the house is owned by the bank.
1 vote Thank Flag Link Sat Jun 30, 2012
the contract for sale also had a claus that the completion of the sell was dependent on the appraised value.
1 vote Thank Flag Link Sat Jun 30, 2012
The house was overpriced becuase it went to "highest and best" and my my offer was accepted the "comps" support the value and it was not MY appraiser it was an indpendent appraiser the lender required and the seller is the person who gave them access to the house. To answer the question why I didn't do a Homepath loan is because they DON'T require an appraisal and if I had goen through them I would have purchased a house with 12, 900 negative equity without even knowing it. Plus I would have needed a renovation loan because the house needs repairs as pointed out by the home inspection. The only way they can sell this house if they had backed out was with a cash offer (who will pay more cash for a house less than its worth) or start all over with the process of re-listing and bidding and they still would have had to re-list at a lower price becuase the appraisal is now part of the house and public knowldge so no lender would have financed it above its value. The area where the house is located is still in distress and it has the highest foreclouse percentage on this side of Atlanta. So they sell it for what it's truely valued at and it's off their books and I get a good deal.
1 vote Thank Flag Link Sat Jun 30, 2012
I did listen to my Relator and the home went "highest best" that's why my offer was accepted the "comps" support the value and so did the CMA but coming in too low what have not gotten me the house. My Relator is confident the seller will adjust the price to the appraised value, I just wanted to know what other experiences were.
1 vote Thank Flag Link Sat Jun 30, 2012
Temecula or GA, does not matter; Fannie Mae does not require an appraisal for HomePath, why are you having one done?
1 vote Thank Flag Link Sat Jun 30, 2012
Why do you have an appraisal on a HomePath mortgage? HomePath does not require an appraisal and one should not be considered.
1 vote Thank Flag Link Sat Jun 30, 2012
I don't have a homepath the house is a foreclosure Fannie Mae I have a conventional loan already approved on the congentecy of the appraised value. I guess I said homepath because it was on their website but not doing FHA or homepath loan
Flag Sat Jun 30, 2012
It's a homepath foreclouse listing but I'm doing a conventional loan
Flag Sat Jun 30, 2012
Diamond82,

It is commendable that your agent was able to get seller adjust to appraisal price. I just placed a full price, cash offer on a Fannie Mae property. I have a appraiser clause in my offer. Multiple offers are being reviewed now. I do feel I have offered too high. The FMV in 2012 tax bill was listed 91% lower than the asking price. The "comps" in the area is about 85% less than this house. While the home is more desirable to me than some "comps". I am hoping I can leverage the due diligence period to get a lower price. What are some other strategies to buy the house lower than the agreed the offer price. My agent seems to say we just need to wait for the next step which is whether our offer is accepted then see how things are playing out. In his view, nothing is set in stone. It depends on how things move along....
0 votes Thank Flag Link Wed Apr 17, 2013
Just because an appraisal is not required by the lender, doesn't mean you can't pay for one yourself and get an appraiser's opinion.
0 votes Thank Flag Link Thu Dec 20, 2012
Just as a quick note. An appraiser is just about value. Finding items in the home not up to code or broken. Also noting additions or room conversions not done with permits. Purchasing a property without an appraisal just isn't a prudent move in my mind.
0 votes Thank Flag Link Sun Jul 8, 2012
Diamont82,

Thank you for your updates. Your detailed explanation of your experience is great information for anyone who considers buying a Fannie Mae property.

I had an experience with a client buying a HomePath approved Fannie Mae property. Our experience was similar to yours but the market was different in that multiple offers were rare at that time. We made a well considered offer based on comps that supported the offer – which was far below the asking price. We got a counter back that made no sense. We waited a few weeks and watched the price reductions. When the price fell to a reasonable range, we made another offer and got another counter offer that did not make sense. After further negotiations, my client closed on the house at a price that was LESS than her original offer.

She did a HomePath loan but we stuck to our guns on price knowing that the asking price was too high. We did not need an appraiser to tell use that.
0 votes Thank Flag Link Sun Jul 8, 2012
Congratulations to Diamond and his agent! They saved $12,000 on the price by sticking to their guns.
There was a possibility that Fannie Mae would back down and they did. There was an alternate possibility of the deal falling apart. Diamond took the risk of that happening and WON.
0 votes Thank Flag Link Sat Jul 7, 2012
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
Hi there,

If you want a Homepath loan give me a call. If you have all documents I need Ill close your deal between 20-30 days. The good thing about a homepath loan is that it would not have mortgage insurance.

Gabino Barrera Jr.
Mortgage Professional

SWBC Mortgage
23705 Crenshaw BLVD. Suit 101
Torrance, CA 90505
424-236-1655-Cell
310-891-1700-Office
310-872-5404-Fax

CA-DOC861438
License by the State of California Department of Corporations under the California Residential Mortgage Act
0 votes Thank Flag Link Thu Jul 5, 2012
I would guess the Home Path property was Appraised before it was put on the market.

have your agent contact the listing agent.

Good Luck
0 votes Thank Flag Link Wed Jul 4, 2012
If you're in a contract, don't you have an agent? What does your agent advise? I don't like to answer questions when it's clear that there may be a legal agency relationship establised between buyer and a Realtor (and/or real estate agent). You have an agent who is representing you, no?!?
0 votes Thank Flag Link Tue Jul 3, 2012
If you are using HOMEPATH financing the property is not subject to appraisal. To answer your question it will depend on the seller. I recently was in a situation like this and the seller did not budge and the buyer didnot have the difference in cash.. To make a long story short the sale did not go through because of this.... I would suggest you speak with your agent about your options...

Good luck...
0 votes Thank Flag Link Tue Jul 3, 2012
You can buy a homepath home but use your own lender, then you do need to have an appraisal done to protect yourself. Duh. DOesn't matter what state you are in, just be sure it's not the "State of Confusion!!!!!"
0 votes Thank Flag Link Sun Jul 1, 2012
Both the seller and buyer have a couple of options. The seller can leave the price as is, drop the price or meet you somewhere in the middle to make up the difference. It makes sense for the seller to drop the price because he may have the same appraisal problem with the next buyer. You as a buyer have a couple of options as well. You can buy the house and pay the difference out of your pocket, ask the seller to reduce the price, meet the seller half way, or cancel and find another home. Your agent will be able to give you your best options.
0 votes Thank Flag Link Sun Jul 1, 2012
I had this happen in December and the seller (homepath) did reduce the price to match the appraisal. My buyers were thrilled and the appraiser actually called out a few repairs that had to completed too.

Good Luck!
0 votes Thank Flag Link Sun Jul 1, 2012
Dear John,

I am happy to hear you received appraised value for your home. I have worked with Fannie Mae as the Seller on foreclosures. Good Luck with your home.

Susan Penn, PA, SFR, CDPE
EWM Realtors® | A HomeServices of America Company | An Affiliate of Berkshire Hathaway
2000 Main Street, Suite 103 | Weston, FL 33326
T: 954.306.7337 | C: 954.557.5993 | F: 954.515.0200 | penn.s@ewm.com | http://www.ewm.com
0 votes Thank Flag Link Sun Jul 1, 2012
Diamond,

Thank you for all of your wonderful explanations of your experience in making your purchase.

Congratulations on getting the seller to agree to reduce the price to the appraised value.

Buyers beware of overpriced HomePath approved properties! Do your homework (actually that is your Realtor’s job) so that you do not agree to pay too much for a property just to avoid having an appraisal. Why would you agree to buy a property that is underwater the day escrow closes?
0 votes Thank Flag Link Sun Jul 1, 2012
John thank you and that's the point I was trying to make I had my realtor to comps for me and than I checked on some for my self. When the house went to higest best and my offer of the asking price and no closing I knew than that doing Homepath loan I would have been overpaying for the house based on the area sales which were are forecloused homes, I actually bidded on 3 in the same area and lost out on them but I did watch what happened to them and none of them sold at the asking price they sold for way below.
Flag Sun Jul 1, 2012
Excellent. Much better loan than a Hommepath loan. Good luck!
0 votes Thank Flag Link Sat Jun 30, 2012
It is best to have your real estate agent work this through with the lender. I am under the impression that Home Path doesn't require an appraisal so am a bit confused. I hope all works out for you.
0 votes Thank Flag Link Sat Jun 30, 2012
Well I'm not sure how often your Realtor has gotten Fannie to lower their price, but it's not likely. Is the house worth what you're paying? If so you're appraiser screwed up and in that case ask for a second opinion, or if your bank won't do that ( likely ) you need to walk to hustle to try and secure alternate financing. Fannie will most likely let you walk and move to one of the other offers.
0 votes Thank Flag Link Sat Jun 30, 2012
The seller of the property is Fannie Mae and HomePath properties are in high demand. While they "might" lower the price, it's doubtful when they can take the next offer without an appraisal and use their own financing and make money on both ends. They have no incentive or reason to lower the price. This is why I'm still baffled why you are not using HomePath financing on a property that is eligible for it. If you are OK with overpaying for the property, then this is the route you should take.
0 votes Thank Flag Link Sat Jun 30, 2012
Looks like your agent got you the answer you needed and even on a Saturday. That's impressive.
Flag Sat Jun 30, 2012
Just spoke to my realtor they agreed to lower the price I sign the new amendment on Monday. They didn't want to kill the deal because the apprsial is what is and the "comps" support it. I close when the assets manger receives the amendment.
Flag Sat Jun 30, 2012
Since HomePath loans are made without the necessity of an appraisal, my opinion is that the underlying houses are often overpriced. After all, an appraisal acts as a control point to try to establish the correct value of the collateral underlying the mortgage loan. With no appraisal, it makes it easier to sell an overpriced house to a willing buyer and obtain the necessary financing.

I suspect that the seller will reduce the price to reflect the appraisal value. Good luck.
0 votes Thank Flag Link Sat Jun 30, 2012
It's possible they will lower the price to the appraisal however it also depends on what papers were signed at the beginning of escrow. Researching comparables isn't an exact science as some homes come on the market after you open escrow that completely changes your picture. Sadly not everyone is versed on how to read comparables. This will make a great difference on value and keep you from losing your deposit.

Homepath is an option but honestly a far less desirable loan program. You give up the appraisal protection and you will pay a higher interest rate. This program is the first accepted by Fannie Mae but it is not a recommended program if you are concerned about not overpaying for your property.
0 votes Thank Flag Link Sat Jun 30, 2012
I didn't want to the Homepath loan because they didn't require an appraisal and that to me seems to risky and not worth the invitives if you end up paying thousands more for a home than it's value and than adding more to the loan with renovation funds. My comps included 6 homes sold in the last 6 months within a one mile radius and the highest one sold was 68, 000 the other five was less than 60,000 so the appraised value is fair the seller can say no but they risk sitting on the house waiting for another buyer who's appraisal will either be the same or less and I just learned the apprsaial report stays with the house six months so since I'm already approved and ready to close it makes since they adjust the price.
Flag Sat Jun 30, 2012
I did listen to my Relator and the home went "highest best" that's why my offer was accepted the "comps" support the value and so did the CMA but coming in too low what have not gotten me the house. My Relator is confident the seller will adjust the price to the appraised value, I just wanted to know what other experiences were.
0 votes Thank Flag Link Sat Jun 30, 2012
This is so confusing:
You are not buying a "HOMEPATH" property; you are trying to buy a FANNIE MAE property that has been approved for a HOMEPATH loan.

You should (must) be using a Realtor to buy an REO from Fannie Mae; why are you not talking to your Realtor and trusting them?

Why didn't you have your Realtor do a CMA before making your offer, to determine the Market Value of the property? Or did you just not listen to them?

There are too many inconsistancies here!
0 votes Thank Flag Link Sat Jun 30, 2012
"I see your question as you are buying a homepath property, I did not see anything saying you are getting a home path loan."

Then let me rephrase:

Why aren't you using HomePath financing that does not require an appraisal? People often think using HomePath means you can only put down 3% and that's not true. Regardless of what your down payment is, you can use a HomePath mortgage to avoid the appraisal issue on a HomePath property.
0 votes Thank Flag Link Sat Jun 30, 2012
Diamond82,
The simple answer is maybe.
The seller has the option or choice to come down to the price, or may request a second appraisal. I see your question as you are buying a homepath property, I did not see anything saying you are getting a home path loan. You should plan on it taking an additional 7-21 days.
Now here is what you need to consider,...
Are you willing to pay for an additional Appraisal with the possibility of the seller not willing to sell at the price? If you are buying with an FHA loan that may be a whole different story.
Talk to your Loan officer.

Harold Sharpe - Broker
So Cal Homes
(951) 821-8211
harold@temeculacaliforniahomes.net
http://www.temeculacaliforniahomes.net
California Department of Real Estate Broker License # 01312992
0 votes Thank Flag Link Sat Jun 30, 2012
Not a homepath loan conventional
Flag Sat Jun 30, 2012
Sorry I'm in Ga not temecula
0 votes Thank Flag Link Sat Jun 30, 2012
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