Home Buying in Atlanta>Question Details

Pfolds87, Home Buyer in Douglasville, GA

when putting an offer in on a homepath property do you have to come out of pocket on any amount above the appraisal if the offer is accepted?

Asked by Pfolds87, Douglasville, GA Thu Mar 6, 2014

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Full disclaimer here. A few months have passed since my last transaction involving a HomePath Property. Fannie Mae would not agree to an appraisal contingency in that transaction (and hasn't for quite some time on any other of my buyer's transactions). The buyer was using an FHA-insured mortgage, so the lender obtained an FHA appraisal which placed a value on that property below the list price. In that instance, Fannie Mae agreed to reduce the price, but was not obligated to do so. In others, however, Fannie Mae refused to lower the price. The buyer was then forced to decide on whether to bring the difference between the list price and the FHA-appraised value to settlement or terminate the contract.

As others have shared, you really need to have experienced, strong representation in these types of transactions to minimize your risks and get safely to the closing table.

Hope that helps.

Solomon Greene
Georgia Real Estate Brokers Associate,
REALTOR®, Certified Affordable Housing Counselor
Keller Williams Realty Atlanta Partners
(678) 775-2677
2 votes Thank Flag Link Fri Mar 7, 2014
You lost me with the first few words - be very careful when doing anything with bank owned / FNMA ownd homes - http://hankmillerteam.com/2014/02/27/fannie-freddie-chumming…

The homes are optimistically priced, buyers are offered "incentives" and told no appraisal is required and there are agents that are more interested in commissions than protecting buyers.

Many buyers hook up with a subpar agent, overpay and never realize it because there's not an independent appraisal. How does this movie usually end?

Be very careful and be certain that agent FULLY EXPLAINS the data just as an appraiser will - and it might make sense for you to pay the 400+- and hire one for yourself if you have any doubts.

Know your market and know that property inside and out
Web Reference: http://www.hmtatlanta.com
1 vote Thank Flag Link Fri Mar 7, 2014
What type of financing are you using? If you are using an FHA or VA, then there is an appraisal contingency clause in the contract that it has to appraise at or above the purchase price. Have your Realtor make out an Addendum to Address Concerns of the Appraisal and ask for a price reduction to the Appraised value. This must be done within your Financing Contingency period of the contract.

Sally Wildasinn, Realtor
ABR, ePro, SRS

0 votes Thank Flag Link Fri Mar 7, 2014
That is why you want and NEED a buyer broker that is well experienced with REO homes. Your offer should be contingent upon obtaining a mortgage and your mortgage is contingent upon the home appraising. If it does not, you can go back and ask for them to reduce the price by sending them the appraisal or have to pay the difference. this where the GOOD agent comes into play using the right wording, right forms and techniques to protect you
0 votes Thank Flag Link Fri Mar 7, 2014
You should certainly plan on having the home thoroughly inspected by a qualified home inspector, as well as having a termite and wood destroying insect inspection. Depending on the age of the heating and cooling equipment you may want to have it inspected by a licensed HVAC company as well. (I recommend this whenever the equipment is 8 or more years in age) Lastly if the property has a basement or is built on a slab you might want to have a Radon test done.

You and every other buyer considering buying a bank owned property need to stop thinking that buying a foreclosure is a deal, They are not. I've been a full time Broker for 25 years, I've been licensed even longer and have extensive experience building and renovating homes. I've been flipping properties for almost 35 years and have never bought a foreclosure because unlike most buyers when I evaluate bank owned properties which I do regularly, I rarely if ever see enough reward to offset the added risk that comes with these transactions. I've attached a link below that offers a lot more information about buying foreclosures.

Hope this helps
0 votes Thank Flag Link Fri Mar 7, 2014
Hi Pfolds

in many scenario homepath would like to see if you have the fund to close if the appraisal comes in short. if your agent can send comp to support the purchase price then they don't ask for extra funds.


Omar Khamisa
Loan Manager
NMLS#: 369325
Cell: 510-648-5535
We close your loan Fast & Easy
Web Reference: http://msjmortgage.com
0 votes Thank Flag Link Thu Mar 6, 2014
For a regular HomePath mortgage, Fannie Mae does not require an appraisal. If you are trying to use a regular Conventional mortgage, FHA, VA or a Renovation mortgage, then an appraisal would be required. Only then do you potentially have a value issue if the property does not appraise.

HomePath® financing allows for a down payment of only 5% on owner occupied properties. If the property is a Second Home or an Investment Property, then it’s as little as 10% down. Also, there is no appraisal required for HomePath® financing, so you will not be charged an appraisal fee. There is also no monthly Mortgage Insurance on HomePath mortgages.

A HomePath Renovation mortgage is also an option for many HomePath properties. This loan program allows you to purchase and renovate in one single loan.

Prospect Mortgage is one of the largest volume HomePath lenders in the country and only one a few offering HomePath Renovation as option. We were also one of the first lenders to offer the loan program when it was launched in early 2009.

Working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your options. To get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com to get started.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of mortgage lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203(k) Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
Web Reference: http://www.rodneymason.com
0 votes Thank Flag Link Thu Mar 6, 2014
Depends on several factors. You need an experienced agent by your side. Please feel free to give me a call anytime.

Byron Weston
Easy street realty
0 votes Thank Flag Link Thu Mar 6, 2014
If you are using the HomePath loan to purchase the property, the only upfront cost would be your Earnest money of course. If using another loan program, then you will have an appraisal cost and your Earnest money. HomePath is a tremendous program that allows you to purchase without an appraisal OR Mortgage Insurance and with as little as 5% down. We can talk more whenever you like.


Wesley C Murphy
Supreme Lending
(404) 585-0249
NMLS 217721
0 votes Thank Flag Link Thu Mar 6, 2014

As mentioned below, the appraisal is not required on a HomePath property if you use conventional (Fannie Mae) financing to purchase the home. Your other out of pocket item would be your earnest money deposit which is not an expense but a pre-payment of your down payment funds.

If you choose to finance the home using other types of financing such as FHA, VA or USDA you would be required to pay for an appraisal.

By the way, you may already know this but Fannie Mae is running a promotion where they are paying 3.5% toward your closing costs. In this case even if you pay for an appraisal you would get the money back at closing.

We do plenty of Homepath loans and I would be happy to discuss your home purchase plans in more detail.

Timothy Brown | LPO Manager
EVOLVE bank & trust
11605 Haynes Bridge Road Suite 125 | Alpharetta, GA 30009
770.255.3880 | fax 678.935.1156 | cell 678.467.9959
NMLS#: 168281
0 votes Thank Flag Link Thu Mar 6, 2014
Last I heard Homepath did not require an appraisal when using their financing. So no additional money would be required.
0 votes Thank Flag Link Thu Mar 6, 2014
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