Think about it; You searched the MLS, saw several properties with your Realtor, and finally found the one! You sat down with your Real Estate Agent and submitted you offer, performed a home inspection, and then the property appraised value does not support the contracted sale price. Now what do you do?
The biggest hurdle to closing in an uncertain market is the lack of comparable properties, especially with FHA and VA loans that require comparable to be within a certain time limit. To bridge the gap between in these under appraised property values, some realtor do a CMA with recent comps. Still, this does not mean the appraiser will budge. So what now?
If the comparable properties suggest the appraiser has undervalued the property, the buyer’s agent and the listing agent must get together to send supporting documents to Fannie Mae and ask for an adjustment.
Questioning comps in transactions involving VA loans has gotten easier since the implementation of the so-called “Tidewater Initiative” in 2003. It allows any party of a real estate transaction to supply market data and information on recently sold properties to a VA appraiser through a designated third-party contact. Tidewater lets you use comparable outside of your area and other material justifications to support a price.
FHA underwriters prefer to see data on two comparable properties that sold in the last 90 days, one that has sold within the past six months, and one that’s currently on the market. In some neighborhoods, that’s hard to find. Your Realtor must be comfortable asking appraisers to help them understand where they got their comparable. You can also hire a second appraisers to present another evaluation of value.
The Home Valuation Code of Conduct, or HVCC, has taken away the power of lenders to do quick closings. The federal regulations, meant to ensure the integrity of the appraisal process, requires that appraisers are assigned by a third party, such as an appraisal management company.
If an appraiser is not familiar with the neighborhood or property type, the result could be a value that’s way off base.
In transactions involving a foreclosed home, it’s not unusual for the bank that owns the property to balk at a valuation that it sees as being too low.
To make the real estate transaction work, a CMA just does not cut it any more,. Your Realtor has to take the time to submit a report that paints a picture of the property’s condition and a neighborhood that the banker has never seen.
To prevent all these problems, Realtors at OCS Realty, llc are asked to always perform a CMA on properties before they submit a contract for the buyer. When the Real Estate Agent performs this CMA, it will provide you, not just with information on the home value, but ensure that your purchase will go through smoother!
