I just blew a deal

[Mike Boyd]

Due to date of sale adjustments, my appraisal came in $32,000 below the contract price. As you can imagine, everyone is up in arms. Loan officer says both agents can provide a multitude of comps that support the sale price. This is an FHA sale.

I told the LO there is a proceedure to follow if they want a reconsideration of value. First they must submit their "evidence" to the underwriter. The underwriter considers that evidence and if he or she feels a reconsideration is warranted, he or she should formally ask by sending me a Request of Reconsideration of Value and I will make an analysis.

Knowing ALL the comps that are out there, the date of sale adjustments are most likely to be challenged. Values have fallen in this market area over 24% in the last 24 months. So, I use 1% per month as a demonstration of diminishing value.

FHA use to have a rationale for charging a fee for the reconsideration. If I recall, that rationale was backwards. So, I would charge an extra fee if the submitted evidence was worthless. If I was wrong, I would not charge. I don't think FHA takes a stand on fees for anything anymore but can any of you other old timers remember the formula?

 

[Jim Bartley]

You can prove the markets are dropping 1%/month?

The reason I ask, is that markets usually drop in stages. So values may have declined from 9-12 months ago, but could be stable over the past 2-3 months.

 

[Mike Boyd]

Not perzactly, but the listings support the final value I found.

 

[panappr]

Geeze Mike, only 24% thats almost stable, compared to the 40% - 50% we're dealing with in some areas of LA County. Agents are not appraisers and have little knowledge with regard to lending standards, just chalk it up and move on. I doubt that you missed any good comps.

 

[Jim Bartley]

Then you're good to go.

You could have some fun with the agents and say....."you know, now that I think about it, I think my estimate is a little on the high side"

 

[Jungle Boy]

Mike

you are not a good business man.

Let me tell you how to maintain good relations with your clients.

The one and only thing you gotta learn is that, you gotta make the value.

rk

 

[Don Clark]

Had one similar from last friday. Sales price was $296,000.00 My opinion was $280,000.00 was provided 3 sales in accordance with what VA calls the Tidewater Iniative. 2 were 9 months old. 1 was a sale where the public record shows$266,000.00 and MLS shows $240,000.00 Could not reconcile why. I showed that the market from 9 months ago until today had declined 6%(we are very fortunate here). 6% of $296,000. = $17,760.00 or more than the difference between my opinion and the sales price.

No call backs yet.

 

[Mike Boyd]

Mike

you are not a good business man.

Let me tell you how to maintain good relations with your clients.

The one and only thing you gotta learn is that, you gotta make the value.

rk

REALLY?..............Do you think? LOL

 

[Pamela Crowley (Florida)]

Additional information and/or sales to be considered as more appropriate as comparable to the subject than what is already used in the original appraisal report is all subject to additional fees.

Any sale provided by others that is not a newer qualified sale of a property that is more similar and closer in proximity to the subject than the sales already provided in the original appraisal report will involve a fee of $150 each for the appraiser to provide a written explanation of why that was not used. If any sale provided by someone else is found to be a newer qualified sale of a property that is more similar and closer in proximity to the subject than those already used in the original appraisal report, the appraiser will put those sales into an addendum grid and provide this free of any additional charges.

Reword as you like.

 

[Mike Boyd]

Had one similar from last friday. Sales price was $296,000.00 My opinion was $280,000.00 was provided 3 sales in accordance with what VA calls the Tidewater Iniative. 2 were 9 months old. 1 was a sale where the public record shows$266,000.00 and MLS shows $240,000.00 Could not reconcile why. I showed that the market from 9 months ago until today had declined 6%(we are very fortunate here). 6% of $296,000. = $17,760.00 or more than the difference between my opinion and the sales price.

No call backs yet.

Don.....you've been around as long as I have. Do you remember what the formula FHA allowed for charging re. the reconsideration of value?