Home Buying in 92562>Question Details

Newtoarea, Home Buyer in 92563

what happens when a short sale house does not appraise? i am concerned because the house i put an offer on

Asked by Newtoarea, 92563 Thu Jul 9, 2009

appraided at 50k under my offer price. the bank has not responded to my original offer price yet, are they going to ask me to come up with the difference? what should i do now? should i resubmit my offer based on the new appraisal or just continue to wait for the bank's approval on my original offer?

Help the community by answering this question:



First of all, you may be waiting a couple of months before hearing anything about your offer. The banks are overwhelmed and until they assign a "Negotiater", to the property no offers will actually be reviewed. There are many steps to completing a short sale and these short sales are all at different stages with different banks that have slightly different procedures.

There is no smooth method or model for purchasing a short sale. Depending on how many loans the defaulting borrower had can make a difference also.

When a property does not appraise the bank will almost always lower the price to the appraised value. I have had them ask for another appraisal on higher priced custom homes that are difficult to find comparables for, but on tract homes it is so easy to find "Recent Sold Comparables", that a second appraisal is usually not necessary.

No body will expect you to come in with money over the appraised value as that is an unreasonable expectation.

You should be looking for "Approved Short Sales". Approved short sales have already gone through the initial process and have had a Broker Price Opinion done and have already had the negotiater assigned.
Web Reference: http://www.soreal.biz
0 votes Thank Flag Link Fri Jul 10, 2009
Dear Newtoarea,

When this happens often the the lender will make a counteroffer, but not always. I have seen some of these lenders require the buyer to come in with the difference. This really depends on two things:
1. The willingness of the lender to negotiate
2. The skill of the negotiator working the Short Sale.
There are other criteria that may come into play such as it was just a bad appraisal or that there were insufficient market sales to use as comparison properties. Either way there are some things that can be done. The lender can be asked to reduce the price to the appraised value, order a new appraisal, or ask for a compromise somewhere in the middle. If the latter is the result it would be up to you to decide whether you wish to move forward. With most Short Sales either party can terminate the contract until the lender gives their approval of the terms of the original offer that was accepted by the seller. Often the Lender will make a counter offer (typically most lenders will do this even just for small incidentals like COE date or commission reductions) either way this gives the buyer a reason to walk away.
You will generally get your best deal on a new Short Sale as the time it takes to get the approval the market has a tendency to improve (at least in certain markets) thus giving you built-in equity. You could look only a approved Short Sales, but there is often much more competition for these properties.
In any case with Short Sales there is no guarantee of success, however the lenders have been receiving more pressure from the government to cooperate with these types of sales.

Best regards,


First Link Realty
Grant Parkman
Real Estate/Mortgages
951-587-0902 Office
951-234-1742 Cellular
855-282-LINK Facsimile
CA DRE 01821999
Office DRE 01926659
CA DRE NMLS 762978
Company NMLS 1008659
0 votes Thank Flag Link Sat Apr 27, 2013
thank you cindi. my lender ordered the appraisal, i dont know why they did it before the bank has approved the original offer. that is not a big deal. my question is: do i submit a new offer now based on the appraisal or do i sit and wait?

another question: how likely is the bank going to approve my new offer which is now $50k under my original. will they ask me to walk or come up with the difference in cash, since there seem to be so many buyers out there fighting over properties?
0 votes Thank Flag Link Thu Jul 9, 2009
My first question is why would you spend money on an appraisal before you have a short sale approval? An approval can sometimes take months. Depending on when this gets approved, your lender may require a new appraisal. If/when that is done, then resubmit at the appraised value. Chances are your lender will already know the value of the home. don't pay more than the appraised value. Listen to your agent.
Web Reference: http://shortsalesheep.com
0 votes Thank Flag Link Thu Jul 9, 2009
The Hagley G…, Real Estate Pro in Pleasanton, CA
thank you fred for your answer. of course i dont want to pay more than the appraised price, but i dont know what to do. my agent tells me since the bank has not responded to my original offer, my best option is to wait for them to say yes or no, then resubmit my new offer at the appraised price. i feel this is a waste of time and argue that i should submit the new offer now, but my agent says that will make the whole process go even slower. i am confused!
0 votes Thank Flag Link Thu Jul 9, 2009
Why would you pay $50,000 MORE than the Appraisal?

Withdraw your Offer and come back at the Appraised Value.

Best wishes to you,
0 votes Thank Flag Link Thu Jul 9, 2009
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