Another agent asked me about a short sale. His seller owed 270k. The house was selling as a short sale for 170k. The lender had two opinions of the house value. They said the house was worth 220k. However, the agent thinks those are incorrect because the house has been on the open market for several months. In addition, similar homes have been selling for around 180k. The biggest reason lenders turn down a short sale is because they think the house is worth more. They have people give them an opinion of value for a nominal fee. Because these people may profit if the lender forecloses on the house, they often turn in high values. If you are selling your house as a short sale, this might happen. Here is how your agent can handle the problem. First off, they will need to "escalate" the file. This means they appeal to the lender and ask them to reconsider. They will then need to show why they think the house is worth less. This is fairly simple. I send the lender a Comparable Market Analysis, also known as a CMA. This is where I show three other similar homes that have recently sold. I compare them to the subject property and give an opinion of value based on those comparisons. I have found it best to use a price per square foot comparison. After all, it is hard to argue that a house is worth X, when all the other homes are selling for the same price per square foot. Your agent will then request the lender order a new opinion of value. Most lenders will usually do that if there is a big discrepancy. Another option is to hire an appraiser. Have the lender review the appraisal. It's hard for a lender in a far away city to argue with an appraisal done by an appraiser familiar with the local marketplace. Thanks for reading this, Merydith Endelman. Merydith is a Real Estate agent at Realty Executives International. Phone: 877-722-8553. merydith.endelman@gmail.com. Helping Homeowners Merydith Endelman specializes in loan modification assistance and short sales in Morris County New Jersey. Morris County Loan Modification Help, Morris County Short Sales. Morris County Short Sale Realtor Short Sale Realtor. Morris County NJ Short Sales. Morris County Realtor. Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Merydith Endelman's personal views and do not reflect the views of Realty Executives International. This information on Question from homeowner: My lender just sold my loan. Is that a good thing is provided as a courtesy to our viewers to help them make informed decisions.
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John Roberts Realty - Eustis, FL
Call the "CHAMPION" for all your real estate needs
Great post you are right we should not just accept no from the Lender we as Agents need to do our job give them the information on what is selling in the area try every way we can to get the transaction closed for our seller.
Nov 18, 2010 04:31 AM
Sonora, CA
Heidi The Home Hunter
Great information. Always get additional opinions on value. And it is good to "suggest" comps to the appraiser too!
Nov 18, 2010 04:34 AM
Realty Executives Bayou Properties - Alexandria, LA
Your Louisiana Real Estate Connection
Merydith excellent post and some great advice. Keep the wonderful blogs coming. You are a true asset to ActiveRain.
Nov 18, 2010 04:50 AM
Emeco Property Solutions, LLC - Morristown, NJ
Thank you all for your comments.
Here's a case that JUST HAPPENED to me this past week. I am the listing agent here.
A Short sale was approved by Chase Bank for $101,000. Original offer on property was $95,000 and this Buyer was only contract on property for last 8 months. Negotiating was done in good faith that the mortgage originator knew what he was doing. The buyer raised their offer to meet Chases' counter.
Mortgage originator FAILED to qualify this buyer who was holding for this entire time period despite the fact that buyers' agent was told that buyer was "good to go".
Has this happened to anyone, finding out that the buyer doesn't qualify that you have been counting on? The mortgage originator could only say sorry. What's that all about?
It has all come down to the motivated buyer finding a cash investor to help close the deal. Chase is now going to accept the original $95,000 offer because they became the motivated party once they found out buyer couldn't qualify for original loan to close. The buyer will then refinance in 91 days from closing.
Has anyone else had this type of experience? We should all write novels.
Nov 27, 2010 08:04 AM
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