Rejected Price Amendment

11 years ago

I have been under contract on a Fannie Mae property since October. It was originally listed at $85,500. I offered 86,500 with the seller contributing $1000 to closing costs. They then asked for highest and best. Because I had been outbid on about 4 homes previously, my highest and best was $91,000. My offer was accepted. I was given a closing date of December 27th and completed everything that was required of me. The lender's appraisal came back at $77,500. I was stoked! I signed an amendment to the sales price and have been waiting since December 3rd for a response. Just yesterday I signed an extension of the closing through December 31, 2012. I was told that the lender had and FHA appraisal done that would stick with the property for 6 months and by law it could not be sold for over that amount. One would think it would be in their best interest to sell it to the person that has completed the process and ready to close.....not so much!

Today I get an alert from the HomePath site that the home is now back on the market. I immediately contacted my agent who informed me that she received an email late yesterday advising that the sales price amendment was rejected. The lender requested a copy of the listing agent's appraisal so that they could negotiate some sort of medium. My agent said she has yet to receive a "release" from the property (forgive me if I use the wrong terminology) so technically we are still under contract and it shouldn't have been re-listed.I have invested money in an inspection and appraisal, as well as 3 months of my life on a home I thought I'd be preparing to move in at this point. Does anyone have any experience with an issue similar to this? I am so aggravated with this!

I apologize for my storybook :)

Comments (6)

ncrealestateguy
11 years ago
I am a little confused. Are you willing to pay the difference between the appraisal price and the sales price?
The seller does not have to accept the new appraisal price. If you are not willing to pay the difference, and the seller does not want to sell at the appraised price, then their only option is to relist it, and hope for a better appraisal next time around,
Am I following your details correctly?
sylviatexas1
11 years ago
I've found Fannie Mae to be very decisive in marketing;
I don't know that returning a house to active status before getting a release from all parties is absolutely precisely the correct procedure, but it does happen.

Appraisals don't bind a seller;
seller can accept a low appraisal or try to get it amended or terminate the contract.

FHA usually won't accept a new appraisal within 6 months of having had one done;
a seller can supply informatin on more comparable sales to try to get the appraisal amended.
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GreenDesigns
11 years ago
If this is a cash sale, then I fail to see what the appraisal matters at all. If this sale is contingent on bank financing, then they won't usualy finance more than 80% of the home's value. And you have to make up the difference in cash. Do you have the 30K in cash to make the deal work? And do you really want to be paying that much over market value for this home? Is it that special? Can you not just move on and find something else?
brickeyee
11 years ago
" If this sale is contingent on bank financing, then they won't usualy finance more than 80% of the home's value."

An FHA loan is very often for less Than 20% DOWN.
_sophiewheeler
11 years ago
If the house only appraises for 77.5, WHY on earth would you want to pay more for it? And how does the seller think that anyone would, unless they are trying for a private cash sale?
sylviatexas1
11 years ago
Appraisals can be very wrong.

If the assigned appraiser isn't familiar with the area (example: there's a little rural area at the edge of our county that has more in common with houses in a neighboring tiny town in the adjoining county than it does with anything else in our county), if (s)he picks only foreclosures, cash/investor sales, & houses that were in bad repair as comparables, & the subject property is a nice, owner-occupied home in good condition, then the appraisal is not going to be accurate.

If foreclosures, etc, are the only comps the appraiser found in the subdivision, (s)he should investigate neighboring subdivisions, etc.

& some very strange things can happen:
about 25 years ago, FHA & VA appraisals were assigned by FHA & VA, & our at-that-time almost entirely rural county had only one FHA/VA approved appraiser.

He appraised houses in his own area very very high & houses everywhere else very very low.

He once drove over 20 miles to find a foreclosure to use as a comparable for a luxury home, when there were lots of comps closer & more comparable to the subject property.

It got so bad that every loan officer & Realtor would warn buyer & seller that the loan would take longer to close because the lender would likely have to submit directly to FHA or VA a request for amendment to the appraisal.

crazy.

(PS: It's safe to move here now; he retired.)