Nancy,

My husband and I just bought a short sale about a month ago, and it was a nightmare. The asking price (which has nothing to do with what the bank will accept) was $195,000 and we offered $190,000 + closing costs. After 4 months, the bank came back with $198,000 and no help with closing. They also said that any counter from us at a lower price would jeopardize the deal. We accepted, then the appraisal came back at only $182,000, and heard that the bank didn't care what the appraisal was and would not accept anything lower than $198k. We thought for sure we wouldn't get this house, because you can't really get financing for more than the home is worth. Luckily, the sellers' parents gave the bank the difference, and we got it for the appraisal price. I don't think this is normal...you have to be prepared for the bank to want more than they can realistically get, and you'll have to walk away. It's tough out there right now. My agent told me that if the bank is local, they are more in tune with the local market and might negotiate more, but if the bank is out of state (like in our case) they don't believe the appraisal and are rather stubborn. Some banks would rather let it go into foreclosure and get less money for the house than short sell it...go figure. It's hard to know what's going on there sometimes. Good luck to you!! Hang in there.

The answer is yes...and everyone who has posted already has valid points and answers. One other thing to keep in mind - and this is due to poor listing techniques by agents who think they know how to handle a short sale - if the appraisal comes in higher, or the BPO comes in higher, they will ask you to pay that price 99% of the time. What has been killing deals left and right is agents listing these properties at unreal prices to get contracts and then having the deal fall apart. It hurts the homeowner who is struggling, and it puts the buyer in a bind trying to trick them into paying the higher price for the time they have invested in the deal. For the first time ever, I had an agent yesterday ask for us to waive the appraisal clause in order to submit our contract. They had 8 offers on the house - I advised our client to find another deal. This is very disturbing and something to watch out for.

Jimmy Mulhern

Nancy
another big problem will be the appraisal. If the appraised value comes in lower than the agreed sale price, if you are financing this purchase then YOU may need to make up the difference between the appraised value and the agreed sale price.

Hi Nancy,

You bring up a great question and one that concerns every buyer who writes an offer on a Short Sale Home.

Unfortunately the answer to that is "Yes the bank can and in many times will adjust the terms of the contract"
Remember you contract has been Ratified by the Seller and it is Contingent Upon Third Party Approval.
In a perfect world the bank would accept the contract as written however there are many variables in there.
Was the home priced at market or above when it was offered for sale?
Are the terms reasonable given market conditions?

I'll give you an example: One of my Buyer clients just closed on his Short Sale this week in Lake Ridge VA. The short sale took 6 months to go through Countrywide ( no kidding) and when it was all said and done, the buyer had asked for $7000 in closing costs and the bank only agreed to $5200. So, when the Short Sale Approval Letter came from the bank, I went back to the buyers lender and said. The bank is only willing to pay $5200 of the Buyers Closing costs. Can you revise the Good Faith Estimate and show the buyer what he would be paying monthly if he were to continue forward with the purchase of this home.
He did, the buyer realized it was still possible for him to buy. He ordered his home inspection, the lender ordered his appraisal and luckily it came in at the value of the contract.

Short Sales are complicated and take a great deal of faith and patience. Let your Realtor know if you have any questions and they will happily guide you through the process.

In the end....you'll get the home you really want! Good Luck Nancy! I hope you get your house.

Peggy James _Exit 1st Choice Realty
Woodbridge Virginia 22192
703-851-3085

http http://:www.ErickandCompany.com
http://LakeRidgeVARealEstateNews.com

ps: remember if you want to search ACTIVE HOMES right now in the Manassas area go to the link below

Yes, the bank can make a counter offer and it's up to the bank to decide should someone else comes with a higher bid as to accept, reject or make a counter; they are looking to get back as much as possible. Keep in mind that until contracts are signed and fully executed anything goes, therefore if you're not comfortable just sitting and around and waiting, keep looking at other properties within your budget.

Anna