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Value of Zillow estimate vs. "appraisal"?

Seller's price was agreed to by buyer. It is higher than the top end of the range estimated by Zillow. Lender's bank says their appraiser values the home higher although buyer's RE agent's comparatives for recent nearby sales are in line with the seller's asking price.
Should buyer just submit counter offer(s) on this short sale? Who actually is in a position to complete negotiations for the lending bank?
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May 21 2010 - Poway
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The bank/lender who is taking the hit has FINAL say, problem is values change all of the time. Even in specific areas, the 'top tier' values may be declining while the 'bottom tier' values may be increasing. Its like a moving 'goal post' for the acceptable value to the lender. Plus BPO's or appraisals may be close but not exact. Add to that sometimes multiple people at the lender may have to 'sign off' on the deal. A counter offer would not be a bad idea.

All of this, though, has little to do with Zillow. I would not use a Zillow zestimate in your negotiations, only comps obtained from a professional, local Realtor or appraiser. You can find an appraiser here, or ask your Realtor for a referral.
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May 25 2010
Banks make decisions based on BPOs.  The trick is to get your agent to convince the bank negotiator that the BPOs are not in line with the market.  There are all types of people out there that are in the business of writing BPOs.  Some are very good and some are done by people who could be thousands of miles away and have never been in the city where the property is located.  We recently received a request from a NY based company that wanted local agents to go and take pictures of local homes.  BPOs were done in NYC.  How good can they be?  You don't have to be a genius to understand why we are in such a mess.
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May 21 2010
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When it is a "short sale", it is the lender that is taking the loss that makes the determination of what is acceptable; not the "seller".

Sure, you could submit a counter offer, but if you don't know what the lender is looking for, you are probably wasting your time.  Why would the lender want to take a larger loss than necessary?

Appraisals are used for loans; not estimates.  Estimates are used for general tracking of market trends, and as a starting point for further investigation.
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May 21 2010
Not quite certain what the Zillow Range has to do with the lenders.
They have no interest in the Zillow AVM (Automated Valuation Model) and won't base any of their decisins on it.
Here is some great information of what to expect from the Zillow and its value estimates.
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May 21 2010
 
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