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AmTrust Short Sale Appraisals

By Wendy Rulnick

Real Estate Broker/Owner with Rulnick Realty, Inc.

April 11, 2008 08:18 AM

I have a Short Sale in process with AmTrust as the first mortgage holder. Their appraiser recently went out, and boy, we have a problem. AmTrust Short Sale appraisal guidelines require the comparables to be within 1 mile of the subject in suburban areas. And, they cannot use foreclosures as comps. The situation is as follows:

Subject: 1400 SF basic house, built 2004, no garage, in neighborhood with many trailers and dirt roads

Offer: $172,000

Real Buyer Comps: Many homes four miles away in new subdivisions, more substantial, 1600-1800 SF, garages, selling in the $180's very recently

Problem: Appraiser cannot use those comps. Only sales in subject's neighborhood are an errant house on pilings that sold for $200,000 six months ago and some other odd-ball sales. Appraiser's forced value is coming in around $200,000

Solution: Appraiser is allowed to get a statement from his "peer" justifying the sale price. He contacted me, as a peer (I am a real estate Broker) and I told him,

"A buyer would not pay $200,000 for the subject property. Foreclosures are reasonable to use as comps in this market, because they are making the market. A typical buyer for the subject, who could afford it, would certainly pay in the $180,000's for a much more substantial home 10 minutes away versus the subject property. In conclusion, using comps that are four miles away is reasonable in the current market, as is using foreclosures."

The appraiser was completely sympathetic and frustrated he was not allowed to use realistic comps. He said I may be asked for a written statement down the road. I will be delighted to provide it.

It's Wendy!

Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.

Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida: Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or 850-650-7883 ext 204

www.ShortSaleForeclosureHelp.com

www.RulnickRealty.com

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Heather the Realtor Orlando, Lake Mary

LemonTree Realty - Orlando, FL

First Time Home Buyers, Bank Owned Homes

ooo that sucks. 1 mile radius I dont feel applies to todays market anymore and a lot of times their arent even current sales in a 1 mile radius with the slow down. However you would think he would adjusted for time and the comp and it wouldnt come out to be $200,000.

Apr 11, 2008 08:28 AM

Wendy Rulnick

Rulnick Realty, Inc. - Destin, FL

"It's Wendy... It's Sold!"

Heather, It is ridiculous. I cannot wait to hear what the bank is officially going to counter. At least this appraiser was trying hard. I'll update the blog when I know more. Thank you. Wendy

Apr 11, 2008 08:42 AM

Steve Loynd

Alpine Lakes Real Estate Inc., - Lincoln, NH

800-926-5653, White Mountains NH

The banks are getting silly, It makes me think that the guy who works for the bank that used to look at new loan applications has nothing to do so rather than loose his job he has to come up with ridiculous guide lines instead.. What should I throw at them today? how about a one mile radius yeah that will throw a monkey wrench in the works lets require that, I'll send the memo right away.. please see new requirements memo thats the ticket that will keep them busy ..

Apr 11, 2008 08:48 AM

Steve, Yes, like "get with reality". I know when I do BPO's they usually accept 5 mile radius for suburban, so I simply do not understand this. Thank you for commenting. Wendy

Apr 11, 2008 08:50 AM

Virginia Hepp - Mesquite NV REALTOR

Desert Gold Realty - Mesquite NV Homes For Sale - Mesquite, NV

Mesquite NV Homes and Neighborhoods - Search MLS

Wendy - sounds like you have a reasonable appraiser. Being stuck with those guidelines makes his job harder, I don't get the 1 mile - I think they all should use a 5 mile rule.

Apr 13, 2008 06:17 AM

Virginia- Yes, the appraiser was the best. I was shocked about this bank's one mile rule.

Apr 14, 2008 01:44 AM

Mark Horan

Resident Team Realty, LLC & Toni's Property Management LLC - Saint Cloud, FL

"The Resident Chef" - Resident Team Realty LLC &

Wendy- Who is your negotiator at Amtrust. I have had great success with them.

Apr 19, 2008 04:28 AM

Mark, The AmTrust negotiator's first name is Sylvia. I did finally succeed in helping the appraiser... However, Sylvia said they have a hard time believing the price, saying, "We do not understand how the value went down 30%" (direct quote). Thus, they are ordering a BPO, too! I told her that was a minor price drop for my area. By the way, at the end of that conversation, she told me I was being assigned to a new negotiator. Wendy

Apr 19, 2008 04:54 AM

Wendy- I just did a short sale with her last week. She was wonderful and we got it approved in 12 days. She was very reasonable. It helped that the appraisal was right at what I sold it for. Send her comps even if they are 5 miles away, send backup why you are using them. Good Luck.

Apr 19, 2008 07:37 AM

Phillip Dwyer

Dwyer Home Appraisal, LLC - Las Vegas, NV

Wendy,

In my experience appraising homes for lenders in pre-foreclosure and reo, many have similar guidelines to those mentioned. However, when a detailed description of the market area and the current market conditions is given, these guidelines are often pushed aside. I include sales trends by quarter, and current listing inventory breakdowns (what % are bank-owned, short sale, foreclosure). The sales trend and listing analysis will lay the foundation for any necessary market condition adjustments in the sales comparison approach to value.

Ultimately, the lender who hired the appraiser, wants to know what the home is really worth. Guidelines do not fit every situation, and the lender knows this. A thorough, detailed description will help them understand and make a better decision. Sometimes the appraiser needs to coach the client/lender processor to make this work better:)

Apr 22, 2008 05:46 PM

Mark, Thank you... Unfortunately my file is no longer with Sylvia.... I am waiting for the new negotiator to respond. Hopefully, he'll be reasonable.

Phillip, I like your idea of sending % bank owned, short sale, etc. I hadn't done that before. There is good news on this one so far. The appraiser with the tight restrictions came in at sale price... The bank, however, is having a hard time believing values went down so much, so is ordering a BPO. I am going to see how that turns out before interceding...

Apr 23, 2008 01:35 AM

Wendy- How is the negotiating going? Who is the new negotiator?

May 03, 2008 05:09 AM

Mark - Since I wrote the blog, three weeks ago-- no word from AmTrust. It is now assigned to a third negotiator, a" Laura". I left a message on Friday. The phone rep said everything was in. I bet they won't agree to the buyer's 6% FHA credit. The Chase (second mortgage) negotiator is calling AmTrust on Monday to see if they'll increase the payout to Chase from $1000 to $2-3000, since Chase is losing $100,000. Thanks for asking!

May 04, 2008 03:04 AM

AmTrust Short Sale Appraisals

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