Rates Are Incredible

I just got a loan funded today and received the following emails:

Listing Agent:  You made a believer out of me.  I never dreamed that you would close this escrow this soon after changing lenders.  I had a similar situation on another property and it took over a month to close.  You definitely got my attention and I plan to keep your contact info. Kudos to you.  Job well done.

Selling Agent:  Thanks Charity.  I was ready to pull the plug on this deal three weeks ago.

Here is the story behind those words.   I have been working with a first time home buyer, looking to purchase in Oakland, for over a year.  We have worked to improve credit and a few technical issues.   But finally, the buyer was in contract.  The underwriting went smoothly, but the appraisal was a whole other story.

The original appraisal came in $25,000 below the contract price.  The sellers agreed to lower the price.   Everything was in line to order loan documents when the desk review came back, cutting to value another $50,000.

We knew that the sellers would not be willing to lower the price again, and everyone was confident that the reduced contract price was supported by other comparable sales.   We asked for a rebuttal from the original appraiser, but the desk review appraiser would not budge from the reduced value that she assigned.  

I complained to the lender that it was unfair to have an appraisal review done by an appraiser in Southern California for the Oakland Hills.   The Oakland Hills is a difficult area to appraise, and having someone unfamiliar with the area setting value wasn't acceptable.   The lender indicated that we could order a field review, but that would take 15 days, but more than likely the field review would support the desk review appraisers value.  I knew that route wouldn't be acceptable to the sellers.  Who would want to grant an extension not knowing what the outcome would be.

The original lender also told me that the Automated Valuation Models (AVMs) indicated a value lower than that of the desk review appraisers value.  We talked to another lender that agreed to take our original appraisal and the new lender ordered AVMs immediately.   Those AVMs confirmed the first lenders number.  

I asked to review the AVMs (after all, the computer only picks properties and doesn't analyze them).   After reviewing the AVMs, I was convinced that the value was supported (because I could analyze the comps).

Next I needed to convince the listing agent.   When the sales price was reduced, the contract read  "no extensions will be granted."  I spoke to the listing agent, explained the situation, requested she approach the sellers for an extension, and outlined for her my plan of action.   

I told the listing agent that if the sellers agreed to an extension, I would order a desk review that would be completed within 4 hours.  The sellers granted the extension.   The desk review from a local appraiser came back support the first appraisers value.   Wow, the sellers knew the appraisal outcome before the extension was even signed.

And now, two weeks later, we are closing, and the buyer and the sellers are very, very happy.

Additional note of interest, the first lender ordered a field review and it also supported value.  

I love happy endings.