You now have a lender who is going to issue an appraisal or order some broker price opinions on the property. This is what has happend in your case. As the buyer you can either accept the higher price or walk out of the contract. Your realtor can send in comparables back to the lender to see if the lender will change the price. I have answered this question awhile ago.
Susan Penn, PA, SFR, CDPE http://about.me/HomesForSale_SusanJPennPA
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You can accept the higher price, walk away from the transaction, or send the bank comparables to substantiate your price. Good luck with you home in Miramar.
Susan Penn, PA, EWM Realtor
that's why, it's important to work with a realtor/lawyer, who are savvy in short sales processing and can talk the finance lingo w the decision-making parties...but sometimes even that doesn't help.
Write your Pam Bondi and ask her why she was one of only 7 attorney general's, who objected to negotiating that the lenders need to be more reasonable and reduce principal so that we can remove the great big clog in our foreclosure system.
If you need help looking for another short sale, let me know. Otherwise, I think it's better, in these days, to work on REO's...there are some great incentives fr FNMA and Freddie Mac...they'll pay 3.5% of your closing costs:) Let me know if I can be of further help.
Eli Givoni, Director
Short Sale Department, LLC
Serving all 50 states
MARS Disclosure for General Commercial Communications
Short Sale Department, LLC is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit.
You signed a contract with the seller which is step one. With a short sale you enter step two which is having the short sale approved with the lender. This lender is letting you know your offer is not what they are looking for, so more than likely they are countering your offer. Do you have an inspection report to show the lender to substantiate your lower price? Have your realtor pull up comparables to show true market value. Meanwhile it does not sound as though there is an approved price, which is what you are looking for.
Susan Penn, PA
In my experience banks are becoming much more reasonable. Yes, they will try to get as close to market value as possible, but that's unrealistic. I find they generally will take 10% to 15% below market value.
Get all your data together, point out every flaw in the property, together with your realtor, do your own market analysis and challenge their number. You may want to try countering with a combination of a slightly higher offer and a credit. They will most likely deny the credit but they may accept the offer without the credit. I had that very thing happen just a month ago.
You and your Realtor should expect the lender to counteroffer your offer. The lender is going to want to get an offer as close to market value as possible. They are after all taking a loss already on the property - they want to minimize that loss. So, you and your Realtor need to decide if you want to (and if you are able to financially) accept the lender's counteroffer once you receive it - or you could try countering their counteroffer but if you really want the house, that might not be a good idea as they may reject your counter and then the whole deal would be dead. Have your Realtor do a Comparative Market Analysis (CMA) on the property using Sold comps within a 1 mile radius to the property (the closer to the property, the better) and that have sold within the last 3 months.
Banks want as close to market value as possible for a short sale. It's not realistic to expect a 10-20% discount off list price just because it happens to be a distressed sale.
What does your agent say?
Your agent will be able to advise you concerning the process the bank, servicer, insurance company and or investor(s) are using to set their expectations.
Finally, you have to ask yourself, 'How much do I like this house?"
I would assume your initial offer was inspired by the great value the list price represented. But, it may have been too good to be true. Welcome to the wild, wild west of short sales. You are not out of the water even if you choose to accept the 25% higher offer from the bank. The bank may choose to not forgive the outstanding loan balance or may want to send the seller a 1099 for the balance, either of which could result in the seller rejecting the deal and you're back at square one. If you really love the house, hang in there and trust the professional representing you. It is highly stressful, anxiety inducing, but can end with a great outcome.
Then you really do not have much of a recourse, as the lender has the last woord on the sales price.
If you really feel that the home is now overpriced by doing the comparables, then the house is not a good value.
If however it is still priced correctly with the comparables and you love the porperty then by all means I would go through with the sale, provided if you are getting a loan the financing will be approved with this sales price.
Remember, it is worth what is is worth to YOU!
South Florida Brokers