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Do banks negotiate the sale price of a short sale if appraisal comes in lower than offer?

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OllieLA

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I have an accepted offer on a short sale that the bank is RUSHING to try and get closed within 24 days!  If my appraisal comes back substantially lower than my accepted offer, will the bank be likely to sell the home to me for the lower price at the value? This home had multiple offers but most offers were like me with FHA.
I only have the 3.5% downpayment so no room to negotiate cash to save the deal.
Any info on how banks would normally handle this?  My offer was very strong and based on the highest area comps but might be well above what the appraiser uses for comps.  What normally happens?  If I am trying to buy it and close fast and want to pay the price of the appraisal, then who would want to pay more?
Would they back out and re-list it and hope to get someone to pay more than the appraised value? How could they know that the next person, would not want to do the same thing and then they have to start all over again and again...
What would most likely happen?  They are trying to close it fast...so there must be some kind of time crunch happening.  Does this help my chances for negotiation?
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June 30 - Los Angeles
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Yanni Raz, "yanniraz1"

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Banks will negotiate anything these days, you have to understand that they don't want to foreclose on properties since they're loosing so much money so they rather sell it through a short sale.
Negotiate with them and tell your agent not to let go.
If you have a good agent he will negotiate a really good deal for you.

Good Luck.
www.homesinsale.com
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July 07
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Tristan Celayeta, "realtz.com"

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Yup, you're right. They would probably renegotiate so that they avoid the expense of redoing the listing/selling process. Yanni is correct, in a downtrending market failing to negotiate could very well cost the lender a bundle. They know that and now you do to.

If the appraisal comes out low it may be disputable. Appraisals are a bit of sticky wicket nowadays when appraisers are often working in foreign turf.

But most likely you've got a deal that will work, Congratulations, premature I realize but probably in order. Keep in mind that YOU got the agreement, that means your offer is best.

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July 10
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edtilton

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If the house doesn't appraise for the price it's no bargain
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July 05
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Johnny James, "Palmdale Mortgage"

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Short Answer Yes they do negotiate the short sale price if the appraisal comes in lower.
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July 03
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Craig Whitlock, "Craig Whitlock"

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I would think you've got a shot at renegotiating the price if the property does appraise for a lower amount.  Know though, that FHA does require 2 appraisals and of course, the lower of the 2 is what sticks.  Good luck!

Craig Whitlock
Coldwell Banker Residential Brokerage
Brentwood West Office
WestsideHomesGallery.com
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July 01
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Yanni Raz, "yanniraz1"

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The banks would want a buyer that will put more money down because this will be a strong buyer in their eyes.
So if they will get a lower offer then yours but with higher down payment, they will take the other offer.

http://homesinsale.com
http://homesinsale.lisitingbook.com
http://condossale.net
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July 01
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Michael Emery, "MikeEmery"

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The truly wonderful thing I was reminded about FHA loans is once the home has been appraised the appraisal sticks to the property like flypaper. So if you opt to not buy the home, the next FHA lender will see that the home didn't appraise in a previous transaction. So my guess is the lender is gonna play ball with you.

Good luck.
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July 01
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Roxy Redenbaugh, "LoanLady Nationwide"

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I have a deal going in CA. where this same thing happened. Appraised value came in lower then accepted offer. The Bank and buyer are re-negotiating. Chances are they will use your appraised value and move forward. They need to move these houses. Good Luck
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July 01
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Michael Russell, "real estate mike"

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You have little leverage room from your info. The thing is if one appraisal comes low they might get a second one. Assuming you used a state approved real estate contract to buy you should have protections in case of an appraisal below sales price. Ask your realtor. In Texas we have a one page amendment where the sales price can be reduced to the appaised value(or less). But this also affects some of the other numbers in the contract and they must be agreed upon also. No one can say if they will reduce the sales price to meet a lower appraisal than sales price, but they do seem to want to sell this property.  
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June 30
 

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