Friday, April 11, 2008

AmTrust Short Sale Appraisals

I have a Short Sale in process with AmTrust as the first mortgage holder. Their appraiser recently went out, and boy, we have a problem. AmTrust Short Sale appraisal guidelines require the comparables to be within 1 mile of the subject in suburban areas. And, they cannot use foreclosures as comps. The situation is as follows:

Subject: 1400 SF basic house, built 2004, no garage, in neighborhood with many trailers and dirt roads

Offer: $172,000

Real Buyer Comps: Many homes four miles away in new subdivisions, more substantial, 1600-1800 SF, garages, selling in the $180's very recently

Problem: Appraiser cannot use those comps. Only sales in subject's neighborhood are an errant house on pilings that sold for $200,000 six months ago and some other odd-ball sales. Appraiser's forced value is coming in around $200,000

Solution: Appraiser is allowed to get a statement from his "peer" justifying the sale price. He contacted me, as a peer (I am a real estate Broker) and I told him,

"A buyer would not pay $200,000 for the subject property. Foreclosures are reasonable to use as comps in this market, because they are making the market. A typical buyer for the subject, who could afford it, would certainly pay in the $180,000's for a much more substantial home 10 minutes away versus the subject property. In conclusion, using comps that are four miles away is reasonable in the current market, as is using foreclosures."

The appraiser was completely sympathetic and frustrated he was not allowed to use realistic comps. He said I may be asked for a written statement down the road. I will be delighted to provide it.

It's Wendy!
Wendy Rulnick, Broker, CRP, CRS, GRI, ABR Rulnick Realty, Inc.
Specializing in SHORT SALES and FORECLOSURES on the Emerald Coast of Florida: Destin, Santa Rosa Beach, Fort Walton Beach, Niceville, Bluewater Bay, Navarre, Seagrove Beach, Watercolor, Sandestin, Seaside, Dune Allen, Blue Mountain Beach, Freeport, Rosemary Beach, Mary Esther, Shalimar, Eglin AFB, Hurlburt Field.

Call toll-free 1-877-ITS-WNDY (1-877-487-9639) or 850-650-7883 ext 204

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