Home Buying in 20171>Question Details

Skz, Home Buyer in 20171

Bank has countered our offer of 275k on short sale at 285K. The appraised value is 275K. What should I counter with?

Asked by Skz, 20171 Tue Dec 21, 2010

We had our offer of 275k on a short sale submitted to bank for review. The bank has now countered this with 285k. I have already got the property appraised and this came out at 275K. Looking for advice on what should be my next step?


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George Creed’s answer
REALTORS have a Code of Ethics that govern how we operate and interface with the public and amongst ourselves. It appears that you have an agent, so I won't provide any advice, but I may opine that Jay is on target.
0 votes Thank Flag Link Thu Dec 23, 2010
1. ask your agent instead of wasting other agents' time

2. if you're on your own, then deal with it on your own thereby losing $1000s. Or grab an erudite agent doing A LOT of busness and pay them a retainer fee of $1000 for the sake of saving you $5000 in the end.

Blows my mind that consumers want our professional advice when they are already on their own or with another agent. It's an insult to an excellent agent's value as a consultant. Period.
1 vote Thank Flag Link Wed Dec 22, 2010
If the property appraised for $275K, then I wouldn't counter with a penny over $275K if I were you. You should counter with no more than $275K and a copy of the appraisal results.
1 vote Thank Flag Link Wed Dec 22, 2010

Sounds like the advice you are getting from YOUR agent is USELESS. It is foolish to order an appraisal before you have total approval from the bank. Furthermore, there are some who would consider this trespassing since your appraiser has no right to go into the property. On top of that..if you were to do an FHA appraisal..without the sellers consent..it can really open up a can of worms. The FHA appraisal will stay with the property for 6 months! Now who would get in trouble for that?

Lastly, as Jay (s) mentions and as Jay (H) applauds..it's amazing that people come to this forum to get these types of questions answered. You obviously lack confidence in your agent and are seeking advice here...soo your question get's answered by a professional and your agent still gets paid. Think about this...how many other areas of your contract do you think are getting ill advised...GUARANTEED you are losing money elsewhere than simply your $$ you are throwing away between 275 or 285k. What is the value YOUR agent is bringing? OR..if you are going it alone (unrepresented) are you saving the 2.5%-3% commission...NO WAY.

I hope yourself and others learn something here. It costs you nothing to use a well qualified professional Realtor..But it will cost you plenty if you don't!

Best of luck and Merry Christmas.

Kind Regards,

Erik J. Weisskopf, ABR,CDPE,CRS,GRI
0 votes Thank Flag Link Wed Dec 22, 2010
Although it's a good idea to run this (and any other questions) past your agent, your lender ultimately will go with the results of the appraisal that they ordered, and for which you paid. Anything else that you'd offer above the appraisal for that property will come out of your pocket--not your agent's (if you have one)--in addition to your closing related costs.
0 votes Thank Flag Link Wed Dec 22, 2010
Here, here to Jay's answer. Ask your agent or get one.
Merry Christmas.
0 votes Thank Flag Link Wed Dec 22, 2010

The reality of an appraisal is that one could have the same property appraised by three different appraisors and arrive a three very different values. We have seen multiple appraisals be $50,000 to $60,000 apart on a home in the $500,000 price range.

Our recommendation is to put your agent to work reviewing recently sold similar homes from the same general area and use this information to substantiate your counter offer. If you expect the bank to move on an appraisal number it's very important to provide them with information that casts a shadow on their number.

Best wishes,

0 votes Thank Flag Link Wed Dec 22, 2010
A Short Sale is where the Bank accepts less than what is owed on the property. Do you know what the current mortgage balance is on this property. This is some extremely helpful information to you as a buyer. If the Bank has filed a "Notice of Default" the first step in foreclosure process is recorded at the courthouse will tell you what the bank is owed. Find out what you are working with before you start making offers.

As a real estate investor/buyer I don't care what the bank has in the deal or what the apprasial says we are in a declining market across thye US. The only thing that counts is waht is it worth to me.

Bill Carey, Broker/Realtor
Cell 704-905-0740
Fax 866-343-5945
Bill.Carey@HendersonProperties.com l http://www.HendersonProperties.com

Henderson Properties
Charlotte's Premier Real Estate Company
0 votes Thank Flag Link Wed Dec 22, 2010
It depends how you had it appraised... Was it your mortgage company that had it appriased, did you hire an appraiser or was it your buyer agents bpo? The bank will often get a formal appraisal and at least 1 bpo to assess what the vlaue of teh property is. Hopfully you have a buyer broker who is exopereinced with short sales, they should speak with the negotiator working for teh seller to see if this is teh banks final offer or if teh bank will accept a counter offer, most banks will not. Countering the banks offer could cause another 2-4 week delay. The key is how bad do you want the property and is 10k a deal breaker?

Please see my blog with a complete list of advice and tips on buying a short sale.
0 votes Thank Flag Link Wed Dec 22, 2010
Hi Skz - it is a little odd to order the appraisal on your side before you get the approval on the short sale. I would wait for the approval before you invest your $450 or so on an appraisal. But nothing can be done about that at this point. Maybe there was a strategy involved, in which case you would need to speak with your agent to see - he/she may have a very specific route that he/she is planning to follow.

What your agent would do next is submit the notice to remove the appraisal contingency - it has several options on it - usually you would ask the seller to sell for the price of the appraisal. I have been in this situation where BOA was the bank in charge of the third party approval and they didn't care that the buyer's bank came up with a lower value - they closed the short sale case.

Good luck.
0 votes Thank Flag Link Tue Dec 21, 2010
Yes, the mortgage company (which is BOA) ordered the appraisal and it came at 275K. I am still to talk to my agent but wanted to gather some research as well

I am guessing the negotiator at the bank is not aware of the appraisal since we ordered it after the contract was ratified and submitted to BOA for approval.

Thanks everyone for the quick responses.
0 votes Thank Flag Link Tue Dec 21, 2010
Hi Skz - when you say the appraised value is $275K, are you saying the mortgage company that is doing your loan ordered an appraisal and that appraisal came in at $275K?

If you are talking about the tax assessment being $275K - this would be irrelevant to the market value. You have to decide on a reasonable price for the property based on other similar properties that were sold in the same neighborhood during the past 90 days.

Regarding what you should counter with, it depends on the bank. Some banks will not give you an opportunity to counter or negotiate. Bank of America used to be notorious for this but I have heard they have been better since they got their new software system. They used to just close the case if the buyer countered and then it would take another 3-5 months to get another approval.

Hope that helps. There is a lot that we don't know here and this is a complex question - the answer could vary based on a lot of factors. If you have an agent, you should have an in-depth discussion with him/her on the pros and cons of your different options.

0 votes Thank Flag Link Tue Dec 21, 2010

You and your agent need to really dig into this. Appraisals generally trump everything. you and your agent should gather all info and talk to other agent.

Good luck,

0 votes Thank Flag Link Tue Dec 21, 2010
Who's appraisal? I have NEVER seen the bank counter for an amount above the appraised value; who told you this? Something is fishy. What does your agent say?
0 votes Thank Flag Link Tue Dec 21, 2010
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