Quick question - if a short sale is approved at $300k (for example) and the appraisal comes in at $330k, does the buyes make up any difference?

Asked by Bigdogx, Phoenix, AZ Thu Sep 17, 2009

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Jacqueline Roersma’s answer
Jacqueline R…, Agent, Anthem, AZ
Wed Jun 23, 2010
If the approval letters have been received based on the $300,000.00 offer, and the agreement notice has been received by the buyer from the seller, then the transaction should be able to close without any further negotiation regarding price.
If the appraisal is from the lien holders in consideration of approving the short sale, and the approval letter and/or agreement notice has not been received by the buyer, the negotiations can be continued. If you have a fully signed purchase contract including a short sale addendum and not the formal approval letters or agreement notice the lien holders could stipulate a price that would be acceptable to approve the short sale anywhere between the $300 and the $330.
In today’s Short Sale world the majority of Agents and Brokers use a Short Sale Addendum which clarifies the agreement notice as: If the Seller and Seller's creditors enter into a short sale agreement, the Seller shall immediately deliver notice to Buyer ("Agreement Notice").
Best Regards,
Jacqueline Roersma, Broker, E-Pro, CDPE, CSSN, GRI, SFR and FiveStar Certified
Phantom Realty 623.580.1580 Ext 101
Jacqueline@PhantomRealty.com
http://www.PhantomRealty.com
0 votes
Brian Bernath, Agent, Kanab, UT
Thu Feb 25, 2010
No. The appraisal is an indication of the present market value and is a "bonus" to the buyer as it shows that they did get the home below what it is relly worth at this time.
1 vote
., , Louisville, KY
Mon Mar 1, 2010
No. The buyers are the winners here; purchasing a home $30K under appraised value.
Web Reference:  http://MichelleDoscher.mobi
0 votes
Stew Keene, Agent, Scottsdale, AZ
Fri Sep 18, 2009
BigDogX,

Is the appraisal your lenders ordered appraisal?

If so, no, you don't have to pay a difference.

That's the simple answer to your question.

Stew Keene
North Phoenix and Scottsdale Area Specialist Realtor
Web Reference:  http://www.stewkeene.com
0 votes
Kyle, , Scottsdale, AZ
Thu Sep 17, 2009
Appraised value is really meaningless....the VALUE of a home is what someone is willing to pay for it at that point in time. Based on you being the best offer at 300k, that is the current value.
0 votes
Kathleen Maz…, Agent, Phoenix, AZ
Thu Sep 17, 2009
Quick Answer:

As the buyer, you paid for the appraisal and it is your information. Great news for you! The value was higher than the agreed purchase price.

If the appraisal came in lower than the agreed purchase price and is part of a contigency in the purchase contract, it would be important information to share with the seller. At this point, you could cancel the purchase contract or negotiate a new purcahse price based on the appraisal.
0 votes
Allen Madril, , Phoenix, AZ
Thu Sep 17, 2009
Bigdogx,

Thanks for your question. In any residential purchase (Short Sale, Bank Owned Property, Traditional Sale, etc...) a Buyer is not required to pay the Seller the difference between the agreed upon purchase price and the current market value as indicated by a recent appraisal when the appraisal comes back above the purchase price. This is great news for the Buyer when this occurs because this means that the Buyer has positive equity in the home. This is particularly beneficial in today's uncertain and declining real estate market. This positive equity is considered a paper gain and is not actually realized until the home is sold. As a homeowner, we all hope that our homes will appreciate in value. This is afterall one of the financial benefits of home ownership.

In the event the appraisal comes back below the agreed upon purchase or sales price the Buyer's lender (If the property is being financed) will not authorize the sale. This finance contingency is discussed in the Purchase Contract you have signed. If this occurs there are several options for the Buyer. The Buyer may cancel the purchase contract and walk away from the purchase or may attempt to negotiate a new purchase price to match the current appraisal.

I hope this helps!

Allen Madril
Realtor, CRS, ABR, GRI
Phoenician Properties Realty
Web Reference:  http://www.AllenMadril.com
0 votes
Carol McAlis…, Agent, Nashville, TN
Thu Sep 17, 2009
if you have submitted an offer for 300k and the bank has accepted and gone into contract...... the appraisal amount means nothing. if they accepted, gone into contract....... all parties have signed, sealed and delivered, the appraisal is not an issue,
0 votes
Bigdogx, Home Buyer, Phoenix, AZ
Thu Sep 17, 2009
Thanks for the answer - also, would the buyer be at all responsible for any other costs you can think of? Thanks
0 votes
Tracey Simms, , Harford County, MD
Thu Sep 17, 2009
No, if you have a ratified contract and the sellers bank has signed off on it the buyer pays $300,000.
0 votes
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