Quote:
Originally Posted by LavrentiBeria
I wonder why the loan officer at Wells Fargo warn my friend about this practice. Why waste both parties time.
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Two things:
1 – While appraisal reviews are now happening virtually 100% of the time, it does not necessarily mean that the bank will always undervalue the property. It’s been happening frequently but it’s not standard practice. There’s a ton of factors involved and each transaction is different.
2 – In the end, while this type of thing makes it VERY difficult to close a deal, the person who ultimately benefits (assuming the transaction takes place) is the BUYER. Think about it, they’d be purchasing at a very low price. Understanding that the market will eventually rebound, he’s practically assured of having equity in his property going forward.