Property Manager · hollywood, FL · Member since 2009 · 7 posts · 0 votes
I just received an appraisal for $50K and I am in contract with the seller (Fannie Mae) at $71K. on a investment property (Duplex). Now I haven't talked to my lender yet but If the lender was still willing to give me a loan for $71K technically can the seller still keep my escrow money? I think that the contract only says that if I can’t obtain financing then I can get out with my escrow. But technically the bank didn’t reject my loan. What are possible outcomes to my scenario? What if I wanted to offer the bank $55K for the property? Would it be in the banks best interest to take it? What if the bank says no and decides to put it back on the market what do you think I should offer the bank for the property? The HomePath program is a scam full of beurocracy and red tape. Am I the victim here? They had a asking price on the property for $74,000 don’t they do any kind of market analysis before they set a price?
You technically can't obtain financing if the appraisal came in too low. The bank won't lend you the money, hence you can't purchase it, hence you should get your escrow monies back.
I would go back in and tell them that you need to re-run your numbers. If the appraisal came in that low then they now know that they will NOT sell it anytime soon for 71k.
Now my next question is how did you as an investor come up with a valuation of 71k for the property? Everytime I run numbers on a property as an investor my numbers have always come in under any appraisals estimate. You're in this business to make money, not loose it. It sounds to me like you need to educate yourself some more before you put offers in on properties. It's very easy to overpay in today's market.
Read this thread to learn how to properly analyze a rental property.