Be Very Careful with FHA Appraisals
I have a Short Sale Listing. List price: $255,000.00 An offer came in at $258,000. Buyer is using FHA financing. Submitted to short sale lender and got an approval. FHA Appraisal came in at $258,000. So far so good. Inspections OK. Then buyer's wife decides she doesn't like the house???? Deal falls apart. Back on Market.
New offer comes in at $263,000. Seller accepts. Submitted to short sale lender and got an approval. Appraisal comes in at $263,000. All is well.
One week from closing, buyer's loan agent advises of the following from underwriting:
APPRAISAL ALREADY COMPLETED FOR THIS PROPERTY & HAS NOT EXPIRED
(LOGGED IN FHA CONNECTION). PROVIDE COPY OF APPRAISAL & MUST BE USED INUNDERWRITING DETERMINATION, PER HUD, EVEN IF BWR HAS CHANGED
APPRAISAL CAME IN AT $258,000 PER FHA CONNECTION. BROKER TO ADVISE IF
PURCHASE ADDENDUM WILL BE PROVIDED & LOAN MUST BE UPDATED
So, what next. Resubmit to short sale lender at a sales price of $258,000. Advise them of the FHA conditions. Ask them to consider their previous approval of $258,000. Hope for the best!
By the way, buyer's are pissed they had to pay for a new appraisal when it couldn't be used.....
John M Scott, Broker / Owner, Scott Keys Properties, Certified Distressed Property Expert (CDPE), Council of Real Estate Brokerage Managers (CRB), serving San Francisco and the surrounding San Francisco Bay Area