Home Selling in 32011>Question Details

Terrie, Home Seller in Florida

Buyers second lender denied appraisal because of lack of comps & can't determine value? What r we to do?

Asked by Terrie, Florida Mon Aug 25, 2008

We have a buyer for our home and land and he has a FHA loan approval. The first lender denied the appraisal for lack of comps. The second lender requested a new appraisal which came back 10 grand less and now the second lender has denied the second appraisal for the same reason, and said the value cannot be determined. As sellers what are we to do?

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The issue with your comps has nothing to do with the fact that the buyer's mortgage would be FHA-insured. Rules for both government and conventional loans place responsibility for the appraisal squarely with the lender, and lenders have become very cautious when it comes to dated and distant comps. In the current environment, most lenders will reject the appraisal, regardless of the value, and regardless of a secondary review, if there are issues with the comps. If they make exceptions, they run the risk of having to buy the loan back from subsequent purchasers. It is possible, however, to deal with this situation successfully. In fact, I have a closing this week for a purchase where dated and distant comps are the only comps available. I was approached for help 2 weeks ago, after there was trouble due to the appraisal. Feel free to contact me to discuss this further: 813-600-3428 or jwheeler@apexlending.com
1 vote Thank Flag Link Mon Aug 25, 2008
Maybe you are tenK grand too high on your price. You can either lower your price, or the buyer can come up with 10K somewhere else, or you can renegotiate on some other points. If you have two appraisals, you probably are going to continue to get this sort of price. You might get more by making it a conventional mortgage--they tend to not be quite so tough. That is one reason why a lot of times a seller won't take an FHA loan or a VA loan--tougher standards.
Web Reference: http://www.MykeTriebold.com
1 vote Thank Flag Link Mon Aug 25, 2008
It is not uncommon to have lenders asking for a second appraisal, particularly if the market is declining in value. The underwriting standards have tightened and lenders want to make sure they are not exposed to more risk than necessary.

Lower the price and get it sold.
0 votes Thank Flag Link Mon Aug 25, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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