I have two offers on REO homes, both owned by the same bank. We are in contract on one after the buyers signed the banks counter offer. The other counter will be signed by the buyers today.

I did a CMA on the Brentwood home and the buyers offered a little less than the CMA recommended with up to 5% back to the buyers for closing costs. Now the appraiser has informed me that the home will not appraise for the amount offered. My CMA was about $5000 high according to him. That's still pretty close on a 399k listing price.

The appraiser is giving us this estimate before visiting the property. We had another appraiser do the same thing without knowledge of the first appraiser and he came in exactly the same. As I have visited the property and many others in the same price range/location/condition I think my estimate is closer to the real value. I take into account the ammenities, location and condition of the home compared to the others. This home was in great shape compared to the other bank properties.

What I'm wondering is this;

Will the bank be willing to lower the price to the appraised value and still leave in the buyers credits in place?

If the buyers decide to back out for some reason will the bank put the home back on the market at the appraised value?

Any new buyers would also need the home to appraise so I assume the bank would lower the price.

It may be crazy but if the bank won't budge and puts the home back on the market at a lower price, we'll make a new offer on the lower price.

One other point I would like to comment on.

When I write an offer I porvide the buyers with an estimate of closing costs. It's almost impossible to do now as the banks are choosing the title company, not the buyers. Yes, the buyer can select their title company but it's not recommended for REO's. Not sure how they get away with this, respa and all. So the banks say their title fees will be less if the buyers use their title company so the buyers agree. But after one week in contract there is still no estimate of closing costs from the title company. Heck, they still have not told us who the title company will be.

These are the same banks that wanted to get into real estate. This is a good indication of what would happen if they did.

The old saying, "Those with the gold rule" fits this situation with banks in control of the escrow process.