<Steve> 82 Report post Posted October 26, 2011 Major burn on an appraisal today. I have had this SLO town house since 2007. I have completed 8 to 10 SLOs and CAs in this town house community. I have always had two to three properties at any one time. I know these properties very well. Back in the day the value of this specific town house was from $120K to $125K. Today, my comps show the value is $109K. A real estate agent comped it at $107,900. Well, the t/b is exercising their option using a VA Loan and the closing is scheduled in a couple of weeks. The appraisal came in at $86K WHAT! Total bull. The report included an REO that was $76K and other low ball sales or foreclosures the highest was $89K It is crap and not correct. I am having the t/b send the realtor comps to their lender. Unfortunately, my t/b is using BofA. BofA has their head up their *** and it doesn't seem they are going to go to batt for the t/b. I wouldn't think that VA Loan requires only looking at the lowest sales for comps? Anyway, this is my third t/b in this property and I have been working with them to get in position to get financed. Being a first time home buyer the t/b does not make this any easier. The only thing it looks like I can do is bring the t/b to my lender who I know will work hard for them. They already qualify for the VA, it is just that screwed up appraisal. I am willing to fight to make it work. I just need to bring the t/b and seller along. Share this post Link to post Share on other sites
pilot76180 51 Report post Posted October 26, 2011 A lender picks the appraiser from a pool they use, and even if you sent comps to the lender to support the price, they will tell you to f off. I've seen this once or twice in almost 9 years. It sucks...BAck in the day we'd use the same appraiser for the FHA loans, but even now the lender picks from a pool just like for VA. Share this post Link to post Share on other sites
<Steve> 82 Report post Posted October 26, 2011 BofA said they will not take any other appraisal, they just want the seller to lower the price. So I say let's get another lender. I don't like BofA anyway as they are incompetent and I pulled all ties with them months ago. I have a lender that will go the extra mile, but not sure if the buyer is willing to put in the extra work. I am going to let both seller and buyer know that I will bust my butt to help make this work, but it will be their call and there are no guarantees. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted October 26, 2011 I am going to let both seller and buyer know that I will bust my butt to help make this work, but it will be their call and there are no guarantees. Unfortunately, not much else you can do, Steve. All lenders are taking a conservative approach these days, and Bank of America is probably the worst among them all. Can the homeowner carry back a second to help the deal fly? Share this post Link to post Share on other sites
<Steve> 82 Report post Posted October 26, 2011 Thanks MC, I did contact the seller about taking a second after your comment. Looks like there is not enough equity and the buyer's financing will not pay off the existing financing. BofA did look at comps and info. I sent to them. They are set on only pulling comps from foreclosures and not true retail. Can't win them all. I have been pulling away from town houses anyway. Seems rents & prices are dropping and foreclosures are high. Everyone in this deal are in acceptance of the reality and no one is pissed, so I will take my 4 year run with this property and move on. Share this post Link to post Share on other sites
ErikOk 10 Report post Posted October 26, 2011 Thanks MC, I did contact the seller about taking a second after your comment. Looks like there is not enough equity and the buyer's financing will not pay off the existing financing. BofA did look at comps and info. I sent to them. They are set on only pulling comps from foreclosures and not true retail. Can't win them all. I have been pulling away from town houses anyway. Seems rents & prices are dropping and foreclosures are high. Everyone in this deal are in acceptance of the reality and no one is pissed, so I will take my 4 year run with this property and move on. This is something I've been curious about. What happens if the buyer exercises and the house doesn't appraise and the seller won't budge on price? What becomes of the option money that you collected. I could see where this could leave the buyer feeling shafted. Erik Share this post Link to post Share on other sites
<Steve> 82 Report post Posted October 27, 2011 Thanks MC, I did contact the seller about taking a second after your comment. Looks like there is not enough equity and the buyer's financing will not pay off the existing financing. BofA did look at comps and info. I sent to them. They are set on only pulling comps from foreclosures and not true retail. Can't win them all. I have been pulling away from town houses anyway. Seems rents & prices are dropping and foreclosures are high. Everyone in this deal are in acceptance of the reality and no one is pissed, so I will take my 4 year run with this property and move on. This is something I've been curious about. What happens if the buyer exercises and the house doesn't appraise and the seller won't budge on price? What becomes of the option money that you collected. I could see where this could leave the buyer feeling shafted. ErikWell, it wasn't me or the seller that screwed anyone. The tenant/buyer understands going in that there is no refund when they purchase the option to buy. No one can predict the future. This tenant/buyer was in the property for (2) years and never got serious about getting into position to obtain financing until the last 3 months of the "extended" one year lease term. I jump up and down and tell tenant/buyers to get a plan to buy and work the plan at the start of the lease term. I have all the team members in place ready to help and for free. With this bogus appraisal, the seller owed more on the property then it appraised for, and they did lower the price to an amount just enough to pay off of their mortgage. The seller also agreed to pay 100% of the buyers closing cost. Upfront the owner paid $400. for the bogus appraisal. The t/b was going to receive 100% financing with their VA loan. If the tenant/buyer worked at it and purchased the town house in the first year as they said, they would own it today. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted October 27, 2011 . . .This is something I've been curious about. What happens if the buyer exercises and the house doesn't appraise and the seller won't budge on price? What becomes of the option money that you collected. I could see where this could leave the buyer feeling shafted. ErikThis possibility exists, more so these days than in the past. The option consideration is nonrefundable regardless of the reasons for the option not being exercised. In addition, in the Option to Purchase Agreement we use, there is a financing disclaimer clause that addresses this. Share this post Link to post Share on other sites
pilot76180 51 Report post Posted October 27, 2011 Hey people...the area of appraisals always has a weird kind of feeling about it...like it's some underground mafia thing...SOOOOO>>>here's the deal...I just got off the phone with an appraiser and I am going to put a Q and A together whether by Skype or a video interview, and I'm going to ask an appraiser several questions and record it. I will then post it on my newsletter and put a link up here for you all. GREAT!!!!!What do I need from you all?Questions.....Send me your questions in an e-mail to John@leasingtobuy.com put "Appraisal Questions" in the subject line because I get a ton of e-mails, many of them asking for free crap, like, can you train me for free and I'll say good things about you and tell all my friends...I will work out the interview details next week and get it rolling to post in the next 2 weeks. Share this post Link to post Share on other sites
Thetattooedinvestor 0 Report post Posted October 31, 2011 Hey people...the area of appraisals always has a weird kind of feeling about it...like it's some underground mafia thing...SOOOOO>>>here's the deal...I just got off the phone with an appraiser and I am going to put a Q and A together whether by Skype or a video interview, and I'm going to ask an appraiser several questions and record it. I will then post it on my newsletter and put a link up here for you all. GREAT!!!!!What do I need from you all?Questions.....Send me your questions in an e-mail to John@leasingtobuy.com put "Appraisal Questions" in the subject line because I get a ton of e-mails, many of them asking for free crap, like, can you train me for free and I'll say good things about you and tell all my friends...I will work out the interview details next week and get it rolling to post in the next 2 weeks. Awesome...this has been something I've been concerned about, since even though I clearly indicate this possibility with the seller in the beginning, it seems it has the potential to be a big deal when the tenant buyer does want to refi... Share this post Link to post Share on other sites
