RealTown's RealTalk

"Only problem with asking the Seller to LIST at or below the appraised
price. . ." and "Tina, using the term "appraised price" would be
grossly misleading".

Stephen,

I realize this is coming from a totally different direction than
the above discussion, but I have been listing lots of short sales and
lenders view the appraisal as their ONLY pricing tool. No matter how
many comparables I send them, the appraiser's "value opinion" is the
only thing they will consider for making decisions on what a property
will sell for, even months after the appraisal was done. Any
suggestions on how to handle this situation?

Pam Jernigan
Keller Williams Williamson County
PO Box 364
Georgetown, TX 78627
Fax # 512-869-5676 Cell # 512-635-7592
ladybug@kw.com

--
Glory Bee Costa ABR, ASR, CRS, CSR, GRI, E-PRO, SRES
Broker Associate
Exit Latham Realty
410-822-2152 EXT 305
Cell 410-310-9081
www.Maryland-Waterfront-Homes.com
Fax 1-866-381-5507
Glory@GloryBeeCosta.com

guess you could send three good comps (indicating a range) and suggest-INSIST that the lender order a

Thank you Stephen. Unfortunately these lenders hire people who don't have the knowledge to be given any authority to make decisions that don't fit into their scripts.

In a 5 week period I had two FHA appraisals done on the same property and the first one came in at $138,000. The second came in at $125,000. The home is going to sell for $110,000. The bank/HUD will not allow me to market the home for anything less than $125,000. I have had the property on the market since November 25th of 2008. I have received one offer of $103,000 and the bank turned it down. So a year of work is going to foreclosure on November 3rd.

This isn't my only short sale listing that has gone to foreclosure for the same reason. What am I doing wrong? I know my market and have been selling real estate, mostly listings, since 1999. I have been told that since I will make money on the transaction that my opinion doesn't count! That came from HUD. I wasn't a happy camper after that.

When you do an appraisal for a short sale, is there any opinion of how long it should take a property to sell at the market value determined by the appraiser? The above listing might sell at the $125,000 some day, but not any time soon and not since November of 2008.

Thanks,

Pam Jernigan
Keller Williams Williamson County
PO Box 364
Georgetown, TX 78627
Fax # 512-869-5676 Cell # 512-635-7592
ladybug@kw.com

Pam, you're probably not doing anything wrong.... it is just that the as you've indicated, the bank employees handling these files, don't have much authority nor knowledge.

These discussions have been on here, on & off for past year... and one thing to keep in mind, is that on a ShortSale, the bank usually won't go below 80% of their perceived value... they probably have both an appraisal and a BPO in their file. And yes, you're opinion of value does not count, you are not unbiased, and that should not be taken offensively. You may KNOW the value, but they hire people to get an unbiased opinion.

The bank may well accept an offer of less than 80% once it goes into REO, but while it's a ShortSale, it's unlikely, unless severely damaged.

So many people claim to be experts on this, and so many classes claim to be able to make you an expert. But fact remains, each bank operates differently, and the same bank may change their guidelines every month.

FNMA & FreddieMac are starting to develop some consistency.... but often have to be "reminded".

If you had an FHA appraisal at $138K, and then $125K, within 5 weeks, something is weird... perhaps there were conditions and/or adjustments... in any case, that's a big drop to $110K or $103K. I don't blame them for not accepting $103K.

FYI... have a buyer ready, because it will undoubtedly be listed as an REO for MUCH less than the ShortSale.

In Houston, most ShortSales do become REOs... I don't have the stats, but I would guess 66%-75%, based upon what I've seen. (I do a lot of BPOs.)

Lindy in Houston

Obviously there appears to be areas of the country doing better in short sales than others.

We have had a high percentage of ours close. Those that did not was due to the verbiage placed in the final short sale approval letter subjecting the seller to possible litigation in the future. Banks have refused to take out. Attorneys have advised sellers not to sign as by signing could remove their now protected rights under California law. California is a one action state.

Many of the REO's we have never were in short sale......either the owners were just too distraught or legal counsel advised them to foreclose due to their particular situation. Many homeowners have literally become paralyzed due to their situation and take no action.

We certainly had our share set to go to trustee sale that was continually postponed.

We had a couple that were sent to sale without our knowledge or the negotiators knowledge. That was a bummer.

You are correct there are many who claim to be experts and think short sale is the best option for all when it is not.

Investors involved really complicate the situation. There are so many variables.

We have seen several out of the area appraisers come in at values way off the board , and it can be either way. Those values were contested.

I even represented a buyer on one that the appraiser was pulling homes from Walnut Creek which is on the border and the house my buyer bid on was in Concord. Two very different markets no matter how close, different school districts etc and I had the listing agent protest and resend back in .

Eventually all worked out and my buyer closed a few weeks back.