What Happens if the Short Sale Does Not Appraise?
It depends. This is definitely a difficult situation for both the buyer and the seller, usually because appraisals are not ordered and completed until after the short sale approval has been received. Typically, the parties wait for weeks, if not months for the short sale approval, and once received the buyer begins their inspections and their lender orders the appraisal. If the home does not appraise, the buyer has the option of coming in with additional funds (just as in a traditional sale), or the seller can go back to the short sale lender and present the appraisal as evidence that the short sale lender should accept less for the property. Unfortunately, the process of getting a new price approved can take as long as the original approval, and in some cases the bank will flat out reject the price reduction. For some banks though, the process of consideration is relatively quick. The important thing for the buyer and seller to understand is that even though the bank has approved a short sale they are under no obligation to sell the home at the appraised value; the short sale approval is based on the offer amount. However, a skilled short sale agent will negotiate effectively with the bank in order to make the bank accept the appraised price.
If you or someone you know is thinking of a short sale on their central coast property. Contact an experienced short sale agent for a free consultation (805) 878-9879.
Tni LeBlanc, Mint Properties
*Not intended to solicit listings currently under contract with another broker.