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Ethics?

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Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
why can't the appraiser see that it is on the market?
Because we are required to report any current marketing activity, as well as any previous sales within the past 3 years. Many lenders or investors do not want to make a conventional loan on something that is currently on the market. The mortage broker is trying to use a slight of hand to get you to lie.

Knowing how they do business, I'd go find another local bank.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
What they are wanting you to do is not unusual. M Leggett is correct that they don't want to know about it. However, if you have not actively listed the home prior to the refinance, then you have not listed the home, regardless of the fact that you are considering selling your home. Now, why you want to be out $5K in fees to refinance then turn around and sell the home, I don't know. The bottom line is that most lenders will not do a loan if the property is currently listed for sale. They don't want you backing out if you get a contract halfway through the deal.

Here's your possible scenarios. 1) You don't list the home, refinance it, spend $5K in fees, then sell your home in 3 months after refinancing, you've recovered a few hundred in lower mortgage payments vs. a loss of $5K in fees. 2) You list the home, you can't refinance it until you take it off the market. 3) You decide not to refinance, but list the home for sale. You have it on the market for 6 months and can't get what you want and take it off the market so to refinance it. The appraiser will disclosed that you had it listed for $zzz,000 and couldn't sell it, so that becomes the upper limit of value. The appraisal should be lower than the asking price.

Bottom line: If you really NEED to cut costs, including probable selling of the home, then go ahead and sell, don't refi it and be negotiable in your asking price.

Hope this helps.

Roger
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Besides, any loan officer that would tell you that is just salivating for his commission on that loan. Now enter his/her 'pet' appraiser that brings in a value higher than it should be.

You spend the extra $5K to get the loan, PLUS, you might end up owing more than your house is worth and can't sell!!! I'm seeing this happen more and more often.
 

wyecoyote

Senior Member
Joined
Jan 15, 2002
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Washington
Scott,

The above postings have gotten it about right. The only thing that I would add is that you may incure prepay penalties in selling the house after the refinance. Most conventional loans do have a prepay penalty for XX month or years. The one that I had was a prepay penalty for 2 years it was something like 2% if memory serves correctly (may vary depending on the lender). So for example if you refinance not only are you out the $5K in costs but then sell 6 months later on a $100K loan you have to pay an additional $2K in prepay penalties. So then you are out a total of $7K in costs that you could have used to buy your new house.

Ryan
 
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