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Old 05-22-2011, 04:03 PM
 
Location: Boca Raton, FL
6,873 posts, read 11,191,509 times
Reputation: 10757

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OK, so I'm a mortgage broker in Florida. Small office. Yes, I am signed up with multiple lenders and have good relationships with the lenders I use.

Recently, I had a purchase deal referred to me. Programs were chosen and a lender chosen. Unique property - absolutely gorgeous. Property did not appraise at the purchase price. (Note: The end lender uses their OWN appraisal management company and they choose someone). When the appraiser went to the property, the listing realtor was there and made sure to let the appraiser know to contact him if there were any questions. (Second note: The seller had done and ordered their own independent appraisal only 1 month before. The appraiser was given a copy of this).

The appraisal came in lower and it was discussed with all parties. At that point, it was decided to rebut the appraisal - there were 6 issues - we did that and the value remained the same. The contract was then modified to a lower purchase price and each party gave some concessions. Everyone seemed to be happy.

Then, all of a sudden, out of the blue, the seller is told not to sign the addendum unless the buyer waives his financing contingencies. We were going for an exception on the file and that was not back yet. (The seller was told this by her attorney). The buyer was given until XX date to waive, otherwise, there were back up offers. He did not feel comfortable signing b/c all the financing was not in place (almost) - dealing with 2 departments at lender and possibly a back up second lender - they wanted another 5% down and this was being contested - great borrower too - the realtor then calls and says - since buyer won't waive, we have a backup offer and now we're going with them.

Backup offer: Cash deal, more money than our guy.

Now, I feel awful. This guy lost his dream home - the appraisal issues tainted the deal and the remarks the appraiser put on the report as to "severly distressed" market, etc. made the chances for the 5% exception remote.

Friday afternoon, I get a call from a lender (2nd position) stating - we have reviewed the file, we love it, he's the kind of borrower we want, we will use your appraisal, we will go to 80% - can close by May 27th. (That call came in 2 hours too late).

This is killing me. I followed procedure; didn't gamble on anything and now this guy loses out. I am devastated. Anybody been there?
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Old 05-22-2011, 04:39 PM
 
Location: Laguna Niguel, CA
768 posts, read 4,331,769 times
Reputation: 457
Yeah I have had that a couple times before, it hurts, as long as you did everything you possible could have done to make it work you'll be able to sleep at night. People are disappointed, but will move on. Perhaps it was just not meant to be for this buyer & this home. The good news is you are still in business, the buyer still wants to buy a home (hopefully) and you have proved to them that you are willing to do whatever it takes.
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Old 05-23-2011, 11:12 AM
 
Location: MID ATLANTIC
8,651 posts, read 22,813,327 times
Reputation: 10469
Oh yeah, been there........as recent at March 6, 2011 when in one day I saw 1.8M go down the tubes......anyone ever wonder how many times you have to originate and process a buyer before it closes?

One low appraisal, two home inspections that had all 3 buyers running.

It's a tough environment and we earn every penny in this market.
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Old 05-23-2011, 12:49 PM
 
Location: Boca Raton, FL
6,873 posts, read 11,191,509 times
Reputation: 10757
Smile Every penny...every penny...every penny

Absolutely. Borrowers have NO idea even after they sign 30 pages at application....it's just I feel so awful...tried everything but just feel like crap...and now I have a lender (small credit union) who would have gone into that 2nd position...but they still wanted him to waive all contingencies.

Smart Money: Did you ever close that one?
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Old 05-23-2011, 02:06 PM
 
Location: Portland, OR
1,454 posts, read 2,482,835 times
Reputation: 1987
This thread makes me smile. It's not like RE is the only place where things don't always go as planned, if only! In my line of work I get to deal with lots of issues that can poison the deal, such of government contract flow-downs, export restrictions, subcontracting restrictions (inside the US, not offshore), disadvantaged business set asides and a bunch of other things that can kill a deal dead, and you never even saw it coming as you aren’t the only party in the chain. It is not unusual to have to review 3-400 pages of documents for a single transaction and some of those docs will make you want to cry, the language is so dry.

I feel for you, but at the end of the day it is all part of doing business, you can't win them all. All I can say is try to do a bit more work upfront to determine if it is going to fly. Does it pass the sniff test? If not, it might be better to turn it down early and move on.

- Tim
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Old 05-23-2011, 04:05 PM
 
Location: Boca Raton, FL
6,873 posts, read 11,191,509 times
Reputation: 10757
Smile The beginning of the deal

It's a sad state of affairs when you can get a buyer approved on a work visa to 80% (primary home) (No US credit score) on an ARM product in the 4's but yet....

another borrower has a score in high 700's, good income, assets and bank will only lend to 75%

2 different counties
Same state
Both single family homes

Common sense gone, just gone.

Tim: I'm glad someone is smiling.
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Old 05-26-2011, 08:33 PM
 
Location: El Dorado Hills, CA
3,720 posts, read 9,962,032 times
Reputation: 3927
It kills me when I see my client disappointed by not getting a house they want. And it's usually because there was a cash offer (for less) that the buyer preferred. But in the end my buyers usually get something they like even better. Sometimes it is meant to be, but it's hard to see their hearts break.
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