HUD rejecting deal - Appraisal came back too high!!?

10 Replies

Has anyone had HUD reject a deal because the appraisal came in higher than the accepted offer?

I accepted a counter on a REO at 133K and they are now saying the offer is conditionally accepted because the bank's appraisal came back higher than the offer price. They say the "ultimate decision lies with HUD".

While I have signed on their paper they have not formally ratified the contract and want to know if I am comfortable proceeding knowing this contingency.

@John Vietmeyer That shouldn't be an issue, it would be a problem for you if the appraisal came back lower than your offer as that means you would have to put money from your pocket in the deal. Who is saying that, the asset manager? 

What i am curious is how/why an appraisal was done before a contract was signed?

Seller is adding a disclosure stating that the contract is subject to HUD approval. Indication is that this is because my accepted offer is below appraisal.

I have not yet paid for an appraisal so anything they have must have been paid for by the bank. 

The selling agent could not explain under what circumstance HUD would disapprove but I guess we will find out.

Something is missing here as this is not a HUD home. It could be a reverse mortgage foreclosure that is subject to different guidelines and dies not appear on HUDhomestore.

Greg - you are right. It has to do with a foreclosure resulting from a reverse mortgage.  

My accepted contract is at 133k and the HUD appraisal is at 140k so hopefully I don't have to go through the appeals process.

http://www.city-data.com/forum/real-estate/1239650-property-being-sold-subject-24-cfr-3.html

Greg - you are right. It has to do with a foreclosure resulting from a reverse mortgage.  

My accepted contract is at 133k and the HUD appraisal is at 140k so hopefully I don't have to go through the appeals process.

http://www.city-data.com/forum/real-estate/1239650-property-being-sold-subject-24-cfr-3.html

Quick update:

I'm still waiting for a ratified contract. The seller accepted my offer which is 5K below the HUD appraised value, but I don't get a ratified contract until HUD has approved. It's been ~ 2 weeks and they will not provide any estimates on how much longer it could take.

Has anyone else experience this?  I'm not sure if I am waiting in vein for this deal to be ratified.  I'm sure if they wait long enough someone will come in with a full price offer.

Took a little over 2 weeks but HUD approved the purchase 5k under the 140k asking price. It was a short sale foreclosure. I now have the ratified contract in hand and project #3 is getting underway.