A real DOOZY this week with an appraisal on a short sale I am mitigating..........
In addition to my own short sale listings, I am also a certified/hired short sale mitigator for other agents.
Right now I have 3 short sales that I am mitigating for other agents in my area.
One of them just got an accepted offer, and the other two I have obtained written approval for. Both of those had 2 lenders on them, and one of them I successfully negotiated the HAFA short sale for, and the sellers will be receiving $3000 from the net proceeds at the close of escrow.
Well, on the one that is not the HAFA short sale, the appraisal was done on the property this week.
But here's the twist:
1. The property was appraised $100,000 below the accepted purchase price!
2. There were MULTIPLE offers on this property!
3. And here's the clincher: the appraiser that did the BPO/Appraisal for the mortgage holding bank was the SAME appraiser that was sent out to do the appraisal for the buyer's lender!!
So now at this point, all we can do is draft an amendment to the contract for the new purchase price at $100k below, revise the HUD, and send it in to the bank to see how it flies.
The appraiser is from out of the area, and for this particular neighborhood that the property is located in, you REALLY need to know the area because it has very distinct neighborhoods within the area that vary drastically in value that are located literally within a mile or two of each other.
I know this neighborhood VERY well, and in fact I own a single family investment property in the area, and I can tell you with 100% assurity that this appraisal is beyond wrong. I mean, the fact that the property had multiple offers on it pretty much tells you right there that it was priced right.
The part that bothers me the most about this is that this one appraiser's actions are going to cause HUNDREDS of people some undue hardship that live in the area, and will unjusitifiably bring the value of the homes in the area down when the market has clearly spoken on what the value really is based on the accepted purchase price within a multiple offer situation.
How are we supposed to recover in this market when we have appraisers who are practicing this kind of thing?
Ralph,
This seems like areal mess. In Toronto our market has been active and pricing has never been higher.
Brian
HI Ralph - Your photo says it all - this is so totally beyond insane! And it drives me crazy that the implications will be so dire for others trying to sell their homes in that area. You have my utmost empathy in dealing with this.
The Appraisal Foundation (TAF) is a quasi/semi governmental agency that provides the umbrella for the Appraisal Standards Board (ASB) and the Appraisal Qualifications Board (AQB). Additionally, real estate appraisers are licensed by the state. I'd take my concerns to these places. If we all did this for every flubbed appraisal, maybe someone will listen.
Hi Ralph...hmmm...seems there were some good suggestions in a Masterminds post I read recently...lol
Seriously...I feel your pain...it will take cash buyers to pull us out sometimes I think.
$100,000 less on a short sale??? That doesn't even make any sense. And the conflict with them being the same apprasier for the buyer's lender?!?!? WOW.
Ouch. It all sounds very fishy to me. Is the appraiser RELATED to the buyer?
Ralph, that is so wrong. We have to sign an arm's length document as realtors, I am thinking there is a conflict of interest for sure in this situation. I've tried to challenge an appraisal before to no avail but clearly, I would challenge it. We have learned that if you meet the appraiser at the house with comps, it is much better received than trying to challenge them after the fact but in this case.... Best of luck with that and keep us posted on the outcome
Ralph, a home is worth what a buyer is willing to pay...and a seller is willing to sell for. When you have a multiple offer situation how can this be? An appraiser is there to justify the price...how much more justification do you need then multiple buyers????
We're doomed.
If the appraisal is low, the bank loses and won't approve the Short Sale.
If the appraisal is high, the underwriter suspects it isn't an arms length deal.
If the appraisal is spot on, the underwriter believes there was pressure on on the appraiser.
I thing more government regulation is the answer. Oh wait!
That's only one of the many problems that goes along with short sales--all collectively impact the market.
I feel you're pain we have experienced the same with out of area appraisers
Insane - this is where the new HVCC regulations have taken us? I like what Lorrie Semler suggested, this appraisal is seriously flubbed. Call somebody!