Low Appraisals: another step in the Short Sale process
It can happen; you have received written Short Sale approval and the Buyer completes their appraisal and the appraisal comes in below the Seller’s Lender’s approved sales price. Now what?
We’ll likely see more of this here in South Florida and nationwide where Sellers Markets are being experienced. Here in South Florida, homes can’t hit the Real Estate Market fast enough for a Buyer to want to swoop it up which will drive up prices resulting from multiple property offers leaving the lower sales prices of the last few months in the dust! We simply do not have enough homes for sale to meet the demands of the Buyers. The law of supply and demand.
When the Buyer’s appraisal comes in below the approved Short Sale price, you don’t have to panic in thinking that your Short Sale will now fall flat on its face. This can happen and you just have to know the process in obtaining a new Short Sale approval from the Seller’s Lender. The Seller’s Lender will want to see the Buyer’s appraisal, along with an adjusted estimated settlment statement from the Title Company reflecting the reduced net that the investor will be receiving along with an addendum to the contract where both the Buyer and Seller agree to the reduced price. You’ll wait again at this point which, you’ve likely gotten used to by now if you’re selling your home as a Short Sale or buying a home as a Short Sale. Typically, it should not be too long, as I’ve seen this being resolved within a week or two and 9 times out of 10 it goes favorable in that the investor agrees to the reduced appraised price. (Unless the investor is Fannie Mae, for example; another subject for discussion).
Hoping for a revised Short Sale approval letter and once you’ve received it, you can proceed towards closing on the Short Sale. See, not so bad...just a hiccup along the way.
Short Sales can and will be challenging yet as long as you have an experienced Short Sale Real Estate Agent going to bat for you, the odds are in your favor.