FHA SHORT SALE - Posted by Jonathan Mednick
Posted by Jonathan Mednick on October 03, 2003 at 22:38:58:
Ok, here’s the deal. I do quite a bit of short sales and just hit a bump in the road with my latest one.
I’ve got all the paperwork submitted to the bank and they sent their appraiser out to the house. I met the appraiser and told her all the problems with the house. I estimated $25-30K in repairs (really, it is $15K max). Appraiser sent it back to the property at $96K AS IS condition with $23K in repairs.
Now, I found out that because it is FHA, the repairs can’t exceed 10% of the AS IS appraised value, in this case the appraisal came back at 20% above it.
So, the bank said if I can get the appraisal to come down on the repairs to under $9600, then they would discount the property 18% and sell it to me for $78,720.
So, if I can get the appraiser to do this, after I close, I would be into the house for about $87K (I pay buyer/seller closing costs plus $1500 cash to the seller, outstanding liens, et.). $20K of renovations and holding it. Another $3K in closing when I sell it puts me roughly at $110K. I can sell this property easily for $130K.
BUT, when I spoke to the appraiser, she won’t come down on the repairs because she doesn’t want the responsibility. Even though I said I as buying it as is and it is a cash deal, she won’t do it. The only way she would is if she got something in writing from the bank stating she wouldn’t be held responsible.
Haven’t yet called the bank rep back but does anyone know how i can diplomatically put it to the bank.
hate to lost a deal over something so small as this.
Any advice, greatly appreciated.