My clients wrote an offer on an REO home that was listed at $380,000 and my clients offered $399,000. The appraisal came in at $376,000.The bank is Indymac.Has any REO listing agents experienced this type of transaction and wha was the result? Do most banks adjust the list price to the appraised value? I would appreciate your input. Thank you in advance,
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One client of mine is telling me to tell buyers agents that if they go significantly over asking, the buyers will be expected to perform even if it does not appraise. This raises all kinds of issues including enforcability, do we all think they can do this and make it stick?
Why do you blame buyers agent? Do they have any other option? Why don't the AM accept the offer which is close to the listing price because they are greedy too? I think that's a fair game. I was always submitting offers close to the listing price but I'm tired of wasting my and my buyers time. Why do the ask "Highest & Best"?
I'm in the same situation where our offer got accepted $25k higher of the listing price and the appraisal came exactly as listing price means $25k lower. I have asked bank to adjust the price, lets see how it goes. Does bank has any other option not accepting it, they already lost money on this house and on top after 45 days will they let it go and re-list in this kind of marketing. If bank does not adjust the price I will ask my buyer to walk away from this too. They are putting 20% down and don't have another 8-10% more.
I am dealing with this on almost every listing. Here is what I am seeing. In my area values are continuing to go down however homes (due to lack of inventory) are selling very fast. Because of this many listings get multiple offers. So buyer agents are advising their clients of offer WAY over asking price to ensure their client get's the house, telling them when it does not appraise they will get the price adjustment. I have had one asset manager refuse to adjust the price and the buyer did come in with the difference. Most do adjust the purchase price, from my expierence. The other issue we are having is because of the changes in how apprasials are ordered (now we have a lot of out of area apprasiers doing our apprasials) I am seeing some very inaccurate apprasials. When I see this I always ask to the apprasial to be reviewed, which honestly seems to do little other than reassure the asset manager I am fighting for their interests. However it often takes a couple weeks. Either of these situations frequently delay closing.
Your client likely has a good chance of getting the price reduced. Hope that answers your questions.
Well, Let me say something different about my area which is near Los Angeles, where appraisers are dropping home values as much as $100K and the deals are busted. Some of the don't know about HVCC and are killing the market. A colleague of mine is thinking of suing the valuator for this type of price malpractice, since buyers walk away from the deal after being in escrow for a long time.
On the other hand, some agents are sbumitting ridiculous offers at higher values than asking price. I had one property at $155K and received offers at $190-230K and the property was a total fixer. I don't get it! Why pay more for a house that is already in need of repairs???
There were several offers on this listing . . . I comp'd the property at $395M, one house in subject's area sold for $405M apprx. two month ago. The appraiser did not use comps close to the subject and none of the comps had a pool and their sq. footage was smaller and the appraiser used comps that were 1.0 mile away, when there were closer comps. I did not use any of the sold comps that the appraiser had used because I used the comps that were more comparable to the subject property that's the only reason why my buyers wrote higher.
Unless there are competing offers, and the buyers are willing and capable of bringing money to closing, offering a higher then list price often brings these issues. Banks 99% of the time have already done full appraisals before listing and will usually list near that price. Or at least the banks I work with do if the property is in very good shape.
Not sure where you are located but in Georgia we have a form for Appraisal Contengencies that is just for this purpose. It's the best way to protect your clients. Without the form, all you can do is ask.
Thank you for your response. There were several offers on subject and the appraiser used comps up to one mile from subject whereas I used comparables closer in location, size and amenities to subject. Yes, we do have an appraisal contingency in the contract. I have submitted an addendum to the Bank and I'll await their response.
Yes, I have and most banks will adjust the value if they receive a copy of the appraisal so they can verify the comps used. They will compare it to the original BPO done by the agent. Why would your clients offer that much more than the list price? As a former AM, this sends a red flag to me!
R. Ann Ellis-Hall > Cindy Billman, SRES ®, SFR®, CDPEJuly 15, 2009 at 4:18am
Hello Cindy - - - A "red" flag in who's direction?
Replies
I'm in the same situation where our offer got accepted $25k higher of the listing price and the appraisal came exactly as listing price means $25k lower. I have asked bank to adjust the price, lets see how it goes. Does bank has any other option not accepting it, they already lost money on this house and on top after 45 days will they let it go and re-list in this kind of marketing. If bank does not adjust the price I will ask my buyer to walk away from this too. They are putting 20% down and don't have another 8-10% more.
Your client likely has a good chance of getting the price reduced. Hope that answers your questions.
On the other hand, some agents are sbumitting ridiculous offers at higher values than asking price. I had one property at $155K and received offers at $190-230K and the property was a total fixer. I don't get it! Why pay more for a house that is already in need of repairs???
There were several offers on this listing . . . I comp'd the property at $395M, one house in subject's area sold for $405M apprx. two month ago. The appraiser did not use comps close to the subject and none of the comps had a pool and their sq. footage was smaller and the appraiser used comps that were 1.0 mile away, when there were closer comps. I did not use any of the sold comps that the appraiser had used because I used the comps that were more comparable to the subject property that's the only reason why my buyers wrote higher.
I certainly hope that they will adjust the price,
Not sure where you are located but in Georgia we have a form for Appraisal Contengencies that is just for this purpose. It's the best way to protect your clients. Without the form, all you can do is ask.
Thank you for your response. There were several offers on subject and the appraiser used comps up to one mile from subject whereas I used comparables closer in location, size and amenities to subject. Yes, we do have an appraisal contingency in the contract. I have submitted an addendum to the Bank and I'll await their response.
Here's an article about it in our local papers...
http://www.contracostatimes.com/realestate/ci_12835938?source=rss
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