I recently placed on an offer on a short sale in Southern California for $175k. The home only appraised for a

Asked by 1st_timer, Rialto, CA Fri Jul 24, 2009

$155k, so I sent a new offer to match the appraisal. According to the listing agent (who hasn't been the most honest agent to begin with) came back with a counter offer from the bank of $160k. Is the bank allowed to counter offer for more than the appraisal? Is there something that I can get in writing that the bank actually did counter for $160? At this point the listing agent is telling me if I am thinking of anything less than $160k to not bother sending a counter offer and just back out of the deal. PLEASE!!! any thoughts?

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1st_timer, Home Buyer, Rialto, CA
Mon Jul 27, 2009
Thank you everyone for your help and believe me every word was taken to heart and will be very helpful in this huge decision.
0 votes
Robert Chome…, , San Diego, CA
Sat Jul 25, 2009
There are some people that are paying the difference if the property appraises for less then purchase price. I'm not necessarily recommending it, but it is happening out there.
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0 votes
Keith Sorem, Agent, Glendale, CA
Sat Jul 25, 2009
The seller can counter at any dollar amount they want.

Can your Realtor prove to the bank that the property is only worth $155? If you are using financing to obtain a loan, can your lender write a letter explaining that due to the lower appraisal the highest loan amount is $155?

Do you want to pay or are you able to pay the additional cost? Do you want to pay more than the home is worth?

Strategize with your Realtor. There are a lot of other factors, such as how long the property has been on the market, how many other properties are on the market like this one?
0 votes
Cami Pinsak, , Camarillo, CA
Fri Jul 24, 2009
I have to agree with Emily here. In a normal transaction, we would get a "counter" in a written format. I have found that generally the most I can get from a lienholder on a short sale is an e-mail. That does seem to be a preferred method of communication between agent and negotiator. Perhaps the listing agent can provide the email for you. Also, see if your agent can provide some statistics. I sent in some statistics showing that average price per square foot matched the offer price and I got approval.
These negotiators are incredibly overworked and are not at all familiar with the nuances of the different areas. If your agent can substantiate the price or the appraisal, than perhaps the negotiator will have something to take to their investors, who ultimately approve or dissaprove the sale.
It can be frustrating. I recently had a poor appraisal kill a shortsale deal I was working on. It was grossly off and no way to justify. I had to let that FHA buyer go and move on to a different kind of financing.
Hang in there. Short sales aren't easy, but they can give you a good deal. I call it "stress equity".
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Emily Knell, Agent, Huntington Beach, CA
Fri Jul 24, 2009
I am really sorry to hear about your situation. Short sales are tough. Every Short Sale listing agent works differently & most aren't that well trained unfortunately. Even the well trained ones still come up against banks who we just want to Slap in the Head because they just don't get it!

You're only $5k off right now. These HVCC laws (which you probably haven't really heard of) does not apply to a Realtor's relationship with an appraiser, it's only the mortg. lender that can't really talk to the appraiser anymore.

I suggest you contact your agent & get a hold of your appraiser & see if they can't boost it to make $160K.

The problem with the bank & "their" appraised value, is that THEY may have appraised the property 30-45 days ago, but won't send out for a "re-do" for usually 60 days.

It is NOT uncommon that you don't get this "counter" in writing from the bank. Believe me, the Listing agent is more on Your side than on the Bank's side & they just want to get the deal closed & get paid! The Short Selling Bank always (100% of the time from my own experience) will never put a counter price like this In writing. They tell us the listing agent, verbally & we tell you the buyer. It's not until there's a verbal agreement between the parties that the bank will actually Approve the Short Sale & THEN put it in writing.

These short sales are a whole new ball of wax in how we (buyers, sellers, agents on both sides) are used to handling these situations.

On Monday, call your lender & have the appraiser send a copy of the report to the listing agent so he/she can submit it to the bank's negotiator, that way he/she can submit it to the investors & they can see what comps the appraiser is using.

Again I want to stress that the Listing agent wants to close this deal just as much as you do, they're NOT employed by the bank & they don't make more money by making more money for the bank. They're contracted by the owner of record (Mr. Smith) to help them to avoid having a Foreclosure on their credit!!

0 votes
Dallas Texas, Agent, Dallas, TN
Fri Jul 24, 2009
WOW anyone knows you can't purchase OR your lender won't lend money on a home overvalued. Your buyer's agent should have comp'd property prior submitting an offer save you time and money.

Sorry hear all this. Recommend withdraw your offer move on.

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0 votes
Debbie Baker, Agent, Ladera Heights, CA
Fri Jul 24, 2009
Re your question about getting something in writing: It's not a real counteroffer unless it's in writing. All contracts for the purchase and sale of real estate have to be in writing to be enforceable. The original offer and any counteroffers together form the whole contract. Debbie Baker, Agent, Keller Williams Realty - Sunset (Los Angeles)
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