Market reduction in FHA Standards

[Bala P.]

Friends,

This property was just reduced $20K and in the MLS description has the vebiage '**$20,000 BACK ON THE MARKET REDUCTION** in *FHA standards'. The current list price is around $20K less than the comp in the same neighborhood.

I did some peeking around in the public records and found out the current seller transferred title in November 2011 and in January 2012 transferred back to him. The deed drawn in November was $19K over the current reduced list price. Also the temporary owner had paid $16K around in January, so I am thinking it looks like the owner financing fell apart or something else? Also the same property went under contract in the beginning of March and fell apart in like 30 days. This looks like the buyer might not have come up with the funds. Does this have anything to do with the reduction in FHA standards.

One reason I can think of is the appraisal came way below the sold price and could not finance the deal.

I am still learning so if any of this does not make any sense please excuse me.

Thanks