Question:

I am buying a shortsale, is it a good sign if bank is appraising home? Do I have a chance still?

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I am buying a house that is a short sale, it is currently in escrow, but the bank has not approved my offer, but I am pre-approved for the amount I offered. Is it a good sign if the bank sent out their own appraiser??

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  1. That's part of the approval process, where the short sale listing said something like "Offers accepted pending lender approval." One of two things will now happen: Either the bank will realize that the offer on the table is at or near fair market price (that's all they're going to get for the short sale) and they'll approve the offer, or they'll figure that the offer is significantly below fair market price and they'll reject the offer. They will then instruct the seller to relist the property at a higher price.

    You then have a couple of options: Submit an offer at a higher price or walk away from the deal.

    The problem with most short sales is the sellers don't get bank approval for the short sale price before putting the property on the market. Selling agents who are not experienced with short sales start out by listing the property for sale and fishing for offers, having no idea if the bank will accept any offers they receive. This is a big waste of time for potential buyers, because now you're tied up in limbo until the bank either approves or rejects the short sale at the price you offered.

    When I was looking for distressed properties (short sales and foreclosures), my agent originally said to avoid short sales, because only 20% of properties listed as short sales actually go through as a short sale (the majority of the other 80% end up in foreclosure). But, I was able to find a property that was a short sale with the price pre-approved by the bank. So, I made that offer on July 1 and closed escrow on July 31.

    If this deal does not go through, work with your agent to find short sales that are already approved by the bank. Otherwise avoid them, because you're really just wasting your time.


  2. The vast majority of lenders will have an appraisal done on any property that is being sold.  Good sign?  Well, typical sign.  If your offer is close enough to appraised value, the lender will accept your offer.  

    This is not a quick process, and don't be surprised if the lender sits on your offer for awhile waiting for other offers to come in.

  3. If you are working with either a lender or a real estate agent, then they are the "go-to" guides in this process.  Currently, the bank that owns the property in question is most likely doing the appraiser to assess the deal on the table.  Get ready to start haggling!

    I work for a mortgage lender and we have access to real estate professionals that might be of more service than your currently receiving.  In addition, it might be a good idea to receive another quote in terms of the loan structure.  I can provide that service.

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