Short sale appraisal

10 years ago

Any one experienced with short sales and the way it works, when the appraisal comes back lower than contract?
We switched brokers, when our original broker was dragging his feet. He, 'jumped the gun,' when ordering an appraisal. On top of that, he sent the wrong contract to the appraisal, so it had a selling price 3500.00 less than the final contract price. The appraisal priced it at the 3500.00 less selling price.
Since we already had paid for the appraisal, the new broker told us she could get it released from the first broker. So, we sent her the appraisal, with the appraised price 3500.00 less than agreed upon contract price.
Instead of taking that appraisal to the listing agent, to take it back to the short selling bank, he had the appraiser change the appraised price. He said it made him feel, 'guilty,' to have it go back to the bank and ask for the 3500.00 less appraised price. He also told us that it would be in, 'breach of contract,' and we would lose the house, if the appraiser wouldn't change the price. Now, we have to come up with 3500.00 more at closing. This seems like fraud to me. Do I personally have to ask the listing agent to take the original appraisal to the bank? I feel that the worse thing the bank can do is say, "No, we want the contract price." What is the real reason our agent doesn't want the short sale bank to see this appraisal? Does anyone know the correct way to go about this?

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Comments (3)

Linda
10 years ago
This doesn't make any sense to me at all. Agents don't order appraisals, your bank does. Agents also don't get a copy (at least in my state) for the listing agent to bring anywhere. It is smart to have the appraiser change his appraisal before it gets submitted to the bank as long as it can be justfied. This all sounds like there is missing info.
StrongWind
Original Author
10 years ago
I should clarify. The first mortgage broker we went to, ordered the appraisal for a different loan, that we don't qualify for, after he assured us that we would qualify for this specific loan. When he drug his feet for over 2 weeks, to get us the application, we shopped for a new loan. Only after we had a new mortgage broker, he told us we didn't qualify for this specific loan. This was even before we told him we got a new loan.
During this time, the appraisal was done and sent to us. We then forwarded it to our RE agent and the new mortgage broker, to do something about the discrepancy. Now, our RE agent got the appraiser to change the numbers on the appraisal.
From a bit of online research, it seems we are not the only people that appraisals for their short sale, have come in over contract price. I have not read in any circumstance, that I could find, has the appraiser been asked to change their original numbers. I would think that an appraiser would be in fear for their license, as this constitutes fraud.
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Linda
10 years ago
No, it happens all the time. If the appraised price comes in lower than your contract price, you will either have to come up with more money or the bank will have to come down. ( in a short sale, they are already short, so unlikely) however, I have read both your posts twice and I can't figure out if the appraisal came in lower than your contract price or higher. You seem to say both.