Short Sale: How Much Is My Home Really Worth?
The best Metro Atlanta Short Sale Realtors agree that the two most important components in a short sale are the homeowner's hardship and the valuation of the property. In today's post, I will be focusing on the property valuation.
When I work with a homeowner on a short sale, I always list the property at market value based on the comparable sales in the neighborhood and I generally include a copy of the comparables report in the short sale package I submit to the bank on behalf of my clients.
However, I make it a point to explain to my clients that the bank will have a broker price opinion (BPO) or an appraisal done to determine the home's value. If necessary, we will adjust the sales price up or down based on the bank's appraisal or BPO.
Things can get a little sticky if an offer comes in before the bank has had the property appraised. If the offer is too low, the bank will make a counteroffer which the buyer can either accept or reject.
But that is not the end of the valuation process. If the buyer is getting a loan, his mortgage lender will also have the property appraised. So, what happens if the appraisal by the buyer's lender comes in lower than the appraisal by the short sale bank?
Well, the buyer's lender is not going to lend more than the property is worth. So, if the buyer wants to proceed with the purchase of the home, the buyer will have to pay the difference between the sales price and the loan amount in cash. Chances are, however, that the buyer will not want to do this.
The next option is to appeal to the buyer's lender to review the appraisal and adjust it upward. If this doesn't resolve the issue, then the final option is ask the short sale lender to adjust the sales price downward. Many of the larger banks have a form that will need to be completed and submitted along with a copy of the buyer's appraisal and any other comparables for properties in the area that sold since the short sale appraisal was completed. The short sale bank will also require an amendment to the purchase and sale agreement and a revised HUD showing the proposed adjusted sales price.
Of course, there is no guarantee that the short sale bank will agree to lower the sales price of the property. However, in instances where the buyer is getting an FHA loan, that fact can be used as leverage in talks with the short sale bank as the FHA appraisal will stay with the property for several months. This is important because a future buyer with FHA financing will be unable to purchase the property for more than the FHA appraisal amount.
If you live in the Metro Atlanta area and are considering a short sale, please give me a call at 678-446-5925 to schedule a no obligation consultation. If you live outside of the Metro Atlanta area and are considering a short sale, give me a call and I will gladly refer you to an experienced short sale Realtor in your area.
When I work with a homeowner on a short sale, I always list the property at market value based on the comparable sales in the neighborhood and I generally include a copy of the comparables report in the short sale package I submit to the bank on behalf of my clients.
However, I make it a point to explain to my clients that the bank will have a broker price opinion (BPO) or an appraisal done to determine the home's value. If necessary, we will adjust the sales price up or down based on the bank's appraisal or BPO. Things can get a little sticky if an offer comes in before the bank has had the property appraised. If the offer is too low, the bank will make a counteroffer which the buyer can either accept or reject.
But that is not the end of the valuation process. If the buyer is getting a loan, his mortgage lender will also have the property appraised. So, what happens if the appraisal by the buyer's lender comes in lower than the appraisal by the short sale bank?
Well, the buyer's lender is not going to lend more than the property is worth. So, if the buyer wants to proceed with the purchase of the home, the buyer will have to pay the difference between the sales price and the loan amount in cash. Chances are, however, that the buyer will not want to do this.
The next option is to appeal to the buyer's lender to review the appraisal and adjust it upward. If this doesn't resolve the issue, then the final option is ask the short sale lender to adjust the sales price downward. Many of the larger banks have a form that will need to be completed and submitted along with a copy of the buyer's appraisal and any other comparables for properties in the area that sold since the short sale appraisal was completed. The short sale bank will also require an amendment to the purchase and sale agreement and a revised HUD showing the proposed adjusted sales price.
Of course, there is no guarantee that the short sale bank will agree to lower the sales price of the property. However, in instances where the buyer is getting an FHA loan, that fact can be used as leverage in talks with the short sale bank as the FHA appraisal will stay with the property for several months. This is important because a future buyer with FHA financing will be unable to purchase the property for more than the FHA appraisal amount.
If you live in the Metro Atlanta area and are considering a short sale, please give me a call at 678-446-5925 to schedule a no obligation consultation. If you live outside of the Metro Atlanta area and are considering a short sale, give me a call and I will gladly refer you to an experienced short sale Realtor in your area.
Very nice i like it keep postiong....
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