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Home Appraisal Lower than Offer: What to do? Edited OP
Posted on 1/14/15 at 12:33 pm
Posted on 1/14/15 at 12:33 pm
So I put in an offer on a house and the appraisal came in about $10,000 less than the offer. This is my first time buying a home and my agent hasn't been in the business very long, but her broker has been in for decades. I'm not sure where the process goes from here or if there are any strategies or approaches to make the deal successful. I don't want to lose out on my money spent on the inspection and appraisal, and I definitely want the house. I am not paying more than the appraisal value as the lender will not loan the money so it seems I am in a bit of a crack here.
Any thoughts or advice is appreciated.
Edit: Another Question
Assuming the seller lowers the sale price of the house, what are the chances he keeps the closing cost assistance in the deal?
Any thoughts or advice is appreciated.
Edit: Another Question
Assuming the seller lowers the sale price of the house, what are the chances he keeps the closing cost assistance in the deal?
This post was edited on 1/14/15 at 1:01 pm
9
Posted on 1/14/15 at 12:35 pm to nhassl1
seller is going to have to lower the price or its a busted deal
Posted on 1/14/15 at 12:36 pm to nhassl1
Happened to me for 5 grand and seller just reduced price.
Posted on 1/14/15 at 12:40 pm to nhassl1
Well, options really are:
1) Seller lower price
2) You pay more cash as lender won't loan more than the LTV using the appraised value
3) Combination of 1 and 2
4) Walk away (I'm assuming your offer is contingent upon appraisal)
I would make sure the appraisal is legit. This is where you might want to see if the broker can help the agent. Was the appraiser looking at different comps? Did the appraiser miss something in the house?
1) Seller lower price
2) You pay more cash as lender won't loan more than the LTV using the appraised value
3) Combination of 1 and 2
4) Walk away (I'm assuming your offer is contingent upon appraisal)
I would make sure the appraisal is legit. This is where you might want to see if the broker can help the agent. Was the appraiser looking at different comps? Did the appraiser miss something in the house?
This post was edited on 1/14/15 at 12:41 pm
Posted on 1/14/15 at 12:41 pm to LSUFanHouston
Seller needs to lower the price $10k or you need to find another house.
This post was edited on 1/14/15 at 12:42 pm
Posted on 1/14/15 at 12:47 pm to anc
quote:
Seller needs to lower the price $10k or you need to find another house.
This happened to me on a house I was selling. I agreed to lower the price. If they won't negotiate then walk.
Posted on 1/14/15 at 12:55 pm to LSUFanHouston
quote:
Was the appraiser looking at different comps?
yes
quote:
Did the appraiser miss something in the house?
no, don't think so.
I was pretty sure I had a good understanding of the situation and this information confirms it. Either he lowers it or the deal is busted. I just hate to lose out on the money that I put in for the appraisal and inspection, but oh well...
Posted on 1/14/15 at 1:16 pm to nhassl1
Both the house I sold and bought had this happen (neither was 10k, though, more like 2k). I split the difference with my buyer and the seller of the new house dropped the price down.
Posted on 1/14/15 at 1:38 pm to nhassl1
Bank won't loan you more than the appraisal - your call..
Posted on 1/14/15 at 1:53 pm to nhassl1
It happened to me (as a seller). We even went back to the appraiser but we couldn't get them to budge.
I got screwed because a Realtor-owned property exactly like mine was sold (only sale in last 6 months) at what I would have netted. So say it should have sold at $210,000 it was sold at $200,000 and the Realtor didn't charge themselves a commission. My house should have sold for $210,000 and I netted $200,000 after paying commission. So, I had to lower my price $10,000.
I was helping out on closing costs and some repairs which we changed to me doing nothing. It didn't net out perfectly but it is what it is.
ETA: We couldn't figure out why the house sold for that much cheaper than the historical prices. So, my Realtor called the Realtor on that house and she told them that is what she did to get out of it quickly.
I got screwed because a Realtor-owned property exactly like mine was sold (only sale in last 6 months) at what I would have netted. So say it should have sold at $210,000 it was sold at $200,000 and the Realtor didn't charge themselves a commission. My house should have sold for $210,000 and I netted $200,000 after paying commission. So, I had to lower my price $10,000.
I was helping out on closing costs and some repairs which we changed to me doing nothing. It didn't net out perfectly but it is what it is.
ETA: We couldn't figure out why the house sold for that much cheaper than the historical prices. So, my Realtor called the Realtor on that house and she told them that is what she did to get out of it quickly.
This post was edited on 1/14/15 at 2:38 pm
Posted on 1/14/15 at 2:20 pm to lsufan1971
quote:
This happened to me on a house I was selling. I agreed to lower the price. If they won't negotiate then walk.
x2. Absolutely don't pay more than the house is worth.
Posted on 1/14/15 at 3:49 pm to nhassl1
if seller does not lower price - walk away, don't be upside down on deal. if seller does drop price, chances of them helping you with closing cost are now none. 
Posted on 1/14/15 at 3:58 pm to lsu tigerdog
quote:
Happened to me for 5 grand and seller just reduced price.
Same here
quote:
if seller does drop price, chances of them helping you with closing cost are now none.
All depends on their situation. Family I bought from had already put a deposit down and paid a month's rent on the place they were renting while they build. For him to start the whole process over, he could've been looking at another month or two paying a mortgage and rent so he lowered it.
Whatever you do, don't pay the difference.
This post was edited on 1/14/15 at 3:59 pm
Posted on 1/14/15 at 4:03 pm to nhassl1
quote:
Assuming the seller lowers the sale price of the house, what are the chances he keeps the closing cost assistance in the deal?
Given the fact that the bubble burst is still fresh in my mind, I'm not overpaying for a house. In reality, you set the value of the house at offer price less seller assistance. If an appraisal comes in $10,000 less, in my mind, as a buyer, I'm giving you $10,000 less. If the seller doesn't like it, the seller can keep the house. I'm not still buying the house if the seller wants to keep the assistance money.
But that means you have to be willing to walk away.
It sucks that you paid for an inspection and appraisal, but consider it a sunk cost, and do what you think is best. Better to waste $1,000 of those fees than $10,000, no?
I mean, if it was 1K or 2K, maybe deal. But 10K that's a big number.
Posted on 1/14/15 at 5:50 pm to nhassl1
Two options:
1. Seller lowers price.
2. You come up with 10K out of pocket.
1. Seller lowers price.
2. You come up with 10K out of pocket.
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