I just fired a listing here in lovely (and HOT) Charlotte NC.

The seller is a veteran.  He purchased this townhome several years ago, his first purchase.  He utilized the VA loan program.  As time went by, he changed jobs and changed areas and this townhome turned into an investment property.

Well, as sometimes happens, the neighborhood went into decline.  Pool and tennis courts shuttered and overgrown with weeds.  Sold properties in the neighborhood mostly a pile of foreclosures in pretty wretched condition.  A couple of nice comps that had been upfitted and renovated-but not enough of them to offset the general direction of the values. (*Note to buyers of real estate-not all neighborhoods go UP.*)

The seller found himself with an evicted tenant and a trashed townhome, and not having maintained a 'slush' fund for real estate investments, was behind on his payments.  So he was grasping for straws and listed the house to try and avoid foreclosure.

Of course, he had gotten to the point of being subject to the provisions of a short sale with the lender.

This place would literally make you gag when you opened the door.  The smells!!  We won't even discuss the poison ivy growing all over the courtyard and the entrance.  This place needs carpet, paint, new cabinets, new appliances, landscaping, and sundry repairs out the wazoo.

Not exactly in turn key condition.

We got an offer.  A cash offer, from a local gentleman who was seeking a place for his mom.  The offer was well within the comps for properties in SIMILAR CONDITION.  I presented the offer to the lender.  Who promptly told me that the VA would be the ones with the final say-so on value and pricing.  So the VA ordered an appraisal.

Let me just say that this particular appraiser is permanently on my 'bad appraiser' list.

Two weeks later (the buyer and his wonderful buyer agent were on ice, waiting to hear something from us, bless both of their patient hearts!), we got the numbers back on the appraisal. 

I immediately spit Diet Pepsi all over my computer and started laughing at the amount of the appraised value!!!  So I asked how the dispute process should begin.  I mean, this particular property in its current condition is NOT going to support that appraised value.

(whew, this is long-winded!)

The lender told me to talk to the VA.  The VA told me to talk to the appraiser.  I was finally conferenced in, between the VA 'valuation consultant' and the appraiser.  Lord, they argued with me til they were blue in the face!!!  I won't even mention that the appraiser was using comps from a year and a half ago to justify their price...

What was scary was this.  The appraiser piped up in the conversation and said:

"I have a problem with investors buying properties cheap, fixing them up, and making a profit."

WHAT???????????????  So the woman has a problem with someone wanting to make a profit on a crappy house?  Sounds to me like an inherent bias.  I asked the VA 'valuation consultant' if a competing appraisal could be ordered.  After all, my job is to be the local market expert-and as that expert, there's no way in the world I can sell it for what the VA has decided it's worth!  The VA said NO.  Said that they will only pay for one appraisal and this was it.

So I fired the listing.  Told the seller that he should purchase what he needs to purchase right now, before his credit is ruined by foreclosure.  Told him to get some advice from an attorney and a CPA before it hits.  Because it's going to hit.  The VA has essentially closed the door on this property and on the lender and on the veteran.  They will spend more money in foreclosure than would have been taken as a loss on this one.  And who suffers?

We all do.