A Creative San Jose Short Sale Solution that Avoided Foreclosure
The Problem: American Home Mortgage Servicing, Inc. (“AHMSI”) closed a short sale file. Trustee sale date was already scheduled. Property was going to foreclosure because the Broker Price Opinion (BPO) and the offer price were $100,000 apart.
After months of working a file and attempts to convince the AHMSI negotiator that their BPO valuation (appraisal) was unrealistically high, AHMSI closed the file because the Buyer would not increase their offer price $100,000.
I sent photos and a detailed summary of the issues with the home and why it would not sell for more than the offer we had on the table to the AHMSI negotiator. The sellers wrote letters identifying all of the deficiencies in their home. The BPO agent used sales comps on the same street that were completely renovated turn-key homes … selling for upwards of $235,000 more than the subject San Jose short sale property.
BPOs are not appraisals. Unfortunately BPOs are used by lenders and servicers on a daily basis to determine the value of short sale properties. The system is not perfect. Unless a San Jose short sale agent disputes a BPO valuation with an actual appraisal it could mean foreclosure.
I pleaded; I escalated; I begged; and I prayed that someone would see the light – all to no avail. The negotiator advised she closed the file and the property would go to Trustee Sale which was scheduled approximately three weeks away. This took place on Friday afternoon.
The Solution: I asked the negotiator if she would hold the file until Monday morning allowing me the time to get a licensed local appraiser to do a complete appraisal on the property, which I am confident will prove the property is worth not one penny more than the offer we have on the table. I explained that she had nothing to lose by waiting until Monday because nothing would be done with the file over the weekend. I explained that if I did not have the appraisal to her by Monday morning then closing the file would be the appropriate thing to do. The AHMSI negotiator agreed!
I immediately called a local appraiser that I met at a property she appraised for one of my buyers. I was so impressed with her I kept her contact information not realizing I would over a year later call upon her to help save a deal and help my clients avoid foreclosure.
It turned out that she was scheduled with back to back appraisals that weekend. I explained my clients’ situation. She has such a kind and caring heart (I knew that when I first met her) she agreed to squeeze in a fifth appraisal on Saturday and to have her written report to me by end of day on Sunday. This meant that she was giving up time with her family to get this done.
Early Sunday afternoon she sent me the appraisal report. The appraised value was the same as the short sale offer we had on the table. The appraiser took the time to carefully offset the deficiencies with the subject property with the comparable sales. She took photos, as I had done, and attached them as supporting documentation.
This San Jose short sale agent could not, and would not have closed the short sale transaction without the professional help and support of a local appraiser who knows the area and the homes in the area. She actually happens to live in the area!
Real estate is local!
I sent the appraisal to the AHMSI negotiator Sunday afternoon. Early Monday morning I called the negotiator to confirm she received the appraisal. She did receive it. She sent the file for short sale approval. The short sale was approved at the appraised value.
The appraiser saved the home from forelosure!
We closed escrow. Buyers were happy; Agents were happy; and most importantly – Sellers were elated and grateful that they had a successful San Jose short sale and were able to avoid foreclosure.
This San Jose short sale agent has used this creative solution successfully several times. It has not once failed to result in obtaining short sale approval on a file that otherwise would have been closed due to valuation issues.
A Creative San Jose Short Sale Solution that Avoided Foreclosure
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