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re: House buying question - didn’t meet appraisal Update: pg 3
Posted on 9/10/22 at 1:53 pm to WhiskeyThrottle
Posted on 9/10/22 at 1:53 pm to WhiskeyThrottle
It’s almost unheard of to cover the appraisal anymore.
1
Posted on 9/10/22 at 1:57 pm to WhiskeyThrottle
Maybe I’m confused, but it’s up to the seller to either a) re appraise and see if they can get a higher number or b) reduce the selling price to match appraisal. You don’t really need to do anything until the seller decides how they’re going to proceed, right?
Upside: you save money. Downside:
Seller says no deal and you walk away. I would think you get your earnest money back though
Upside: you save money. Downside:
Seller says no deal and you walk away. I would think you get your earnest money back though
Posted on 9/10/22 at 2:02 pm to LSUGUMBO
quote:The buyer’s lender would have to agree to accept another appraisal. The rest would depend on how the contract is written
Maybe I’m confused, but it’s up to the seller to either a) re appraise and see if they can get a higher number or b) reduce the selling price to match appraisal.
Posted on 9/10/22 at 2:45 pm to Dominate308
quote:I see them on cash deals involving renovation purchases a lot.
It’s almost unheard of to cover the appraisal anymore.
I never recommend waiving an appraisal on a financed contract. I’ve had people do it, but they were putting substantial cash down.
Posted on 9/10/22 at 2:50 pm to llfshoals
If you’re contingent, don’t even bother.
Posted on 9/10/22 at 2:54 pm to llfshoals
quote:
The buyer’s lender would have to agree to accept another appraisal. The rest would depend on how the contract is written
Oh ok. We had an appraisal come in $25,000 low. It was the 2nd appraisal we got because the first buyer’s financing fell through, so we appealed the appraisal, showing the comps the first appraisal used, but they didn’t want to amend it, so we walked away. Got a third contract that appraised for the same as the first one. Dumb arse VA appraisers.
Posted on 9/10/22 at 3:01 pm to WhiskeyThrottle
Not to sound like a dick, but the answers to all of these questions are in the contracts that you signed, read them.
Nobody on TD can help you in any way since we haven’t read the contracts
Nobody on TD can help you in any way since we haven’t read the contracts
Posted on 9/10/22 at 3:17 pm to WhiskeyThrottle
quote:
But she does want to argue it.
Well I guess she does. More money for her.
Posted on 9/10/22 at 3:19 pm to LSUGUMBO
quote:They’re….different to be sure. I really take time to talk to clients about FHA and VA contracts for buyers and my listings around repair and appraisal contingencies.
Dumb arse VA appraisers.
Posted on 9/10/22 at 4:03 pm to MikeBRLA
quote:
Not to sound like a dick, but the answers to all of these questions are in the contracts that you signed, read them. Nobody on TD can help you in any way since we haven’t read the contracts
It’s fine. I know I’m asking questions that are contract based at this point.
I did find in the buying agreement that we have until 3 days before closing to back out on appraisal concerns without losing earnest money. So that’s one question answered.
I’m in east Texas fishing and setting up deer feeders and this all started yesterday. So I can’t easily find shite in my contracts.
The next question is the selling side of our existing house. What are the repercussions if we back out. I’ll see if I can find anything in our selling contract. What sections of our contract should I look in for that?
Posted on 9/10/22 at 4:13 pm to WhiskeyThrottle
quote:In my opinion, as you said you had options on living somewhere. Honor the contract you signed. You signed it in good faith, and so did the buyers.
The next question is the selling side of our existing house. What are the repercussions if we back out. I’ll see if I can find anything in our selling contract. What sections of our contract should I look in for that?
If the buyers really want to push the issue, they can force the sale, and you’ll be picking up the legal tab as you’re trying to cancel a valid contract you voluntarily signed.
Having said that, most times people don’t want to go through the hassle. Give them the earnest money back, pay their inspection/appraisal expenses and they’ll go buy something else 99/100.
Posted on 9/10/22 at 5:41 pm to cas4t
quote:
But yes to this answer, at least that’s my understanding. That’s the point of earnest money.
No it is not. Unless it’s the most poorly written contract in real estate history the buyer can walk if the appraisal is low. The buyer is in the drivers seat here.
Posted on 9/10/22 at 8:50 pm to WhiskeyThrottle
quote:
The next question is the selling side of our existing house. What are the repercussions if we back out.
Generally, again this will be stipulated in your contact, is they get 10% of the contract price, OR they can sue you for “specific performance” (force you to sell) if you back out of the contract. The buyer gets to choose which.
Posted on 9/10/22 at 9:01 pm to WhiskeyThrottle
Is the seller’s realtor possibly intentionally setting their client up to eat shite and take less?
I listed a home in BR a couple of months after the floods in 2016 and intentionally went $20k over the assumed appraised value. Someone immediately put in an offer for the asking price, and I brought the appraisal concern up to my realtor, who said not to worry about that. 3 weeks later the appraisal comes back where I expected and buyer can’t secure financing. My realtor tries to pressure me into dropping to appraised value and goes apeshit when I tell her no and fire her. Turned it into rental property and have done great since then.
My point being is there some chance the seller’s realtor isn’t going to push them to drop the price? $85k is a lot to you guys, but it’s only $2,550 to the realtor, and half that goes to their broker anyway.
I listed a home in BR a couple of months after the floods in 2016 and intentionally went $20k over the assumed appraised value. Someone immediately put in an offer for the asking price, and I brought the appraisal concern up to my realtor, who said not to worry about that. 3 weeks later the appraisal comes back where I expected and buyer can’t secure financing. My realtor tries to pressure me into dropping to appraised value and goes apeshit when I tell her no and fire her. Turned it into rental property and have done great since then.
My point being is there some chance the seller’s realtor isn’t going to push them to drop the price? $85k is a lot to you guys, but it’s only $2,550 to the realtor, and half that goes to their broker anyway.
Posted on 9/10/22 at 9:05 pm to WhiskeyThrottle
quote:
are we obligated to sell our house still if we don’t buy the next house? We haven’t closed.
If you tried this shite with me in a hot market, I'm getting an attorney and making this painful, win or lose. Just sayin'
Posted on 9/11/22 at 12:15 am to MyRockstarComplex
quote:According to the appraisal, the value for the property is less than the seller thought it was. No way to know who decided what the price was. I’ve run comps analysis for clients who didn’t much like what I told them and wanted it priced 20% higher. I haven’t had one who did so sell it for that extra 20% yet.
Is the seller’s realtor possibly intentionally setting their client up to eat shite and take less?
quote:If the seller wants to sell, advising them they’ll need to negotiate down the price (or possibly some other concession) is what a good realtor will tell them. The seller will decide whether or not that’s acceptable. (A realtor who doesn’t sell much might get pushy about it)
My point being is there some chance the seller’s realtor isn’t going to push them to drop the price? $85k is a lot to you guys, but it’s only $2,550 to the realtor, and half that goes to their broker anyway.
You overvalued your property and didn’t sell it. You had the ability to use it as a rental property. This seller may not have that luxury.
Posted on 9/11/22 at 1:30 am to WhiskeyThrottle
quote:
Not a bad idea asking for the earnest money out of the agents selling commission check.
That isn’t how this works, this isn’t his any of this works!
Why aren’t you reviewing the purchase agreement that you signed? Why hasn’t your agent gone through and explained any of this? As an agent, I’d be embarrassed if one of my clients felt they needed to take this level of detail questions to a message board.
quote:
Appraisal came in $85k low on the new house.
Were you in a bidding war to get this far over the appraised value? Did your agent provide you any comps when making your offer so that you could get an accurate gauge?
This post was edited on 9/11/22 at 1:35 am
Posted on 9/12/22 at 11:28 am to VABuckeye
quote:
No it is not. Unless it’s the most poorly written contract in real estate history the buyer can walk if the appraisal is low. The buyer is in the drivers seat here.
It appears this is where we are. In the driver's seat. I was away from my computer this weekend and hate to look at crap on my phone. Contracts in particular.
For the answers to my OP:
1 - It appears we are obligated to sell our current at this point. We did not make the sell contingent on the next purchase closing. Wish I would have known that was an option, but I'm not an agent and have only sold one home. As it was mentioned, we could roll the dice and back out on the buyers of our house, but the wife and I have somewhere to go, and we're not willing to take that chance.
2 - Our earnest money is not in jeopardy. Wording in the contract is clear on that. If we don't meet appraisal, then we renegotiate and earnest money is awarded back to us if funding cannot be secured or sellers don't meet appraisal.
3 - After reviewing the comps, I don't have any hesitation with the appraisal as it came in. The area we are looking has some older run down properties within a couple of miles. My agent made it sound like those homes were used as comps. That wasn't the case. Sounds like the agent forgot who the clients were on this deal for a minute but we are back on track.
From what I understand, the appraisal sticks with the property from this time forward. The sellers are contesting the appraisal to try to get the value up which is fine. That is subject to my lender's scrutiny. Based on the appraisal, it was thorough and wasn't miles off from other comps. So it appears it may not go anywhere higher, but we will see. The sellers will run into this issue with any other potential buyers if they decide to walk, and they already have another house, so they may very well come down on the price. But $85k is a huge gap to bridge and I'm not going into a house upside down in any case here. So they need to meet whatever appraisal gets finalized at, or we aren't willing to move forward.
Fortunately this process exists or I admittedly would have made a stupid financial mistake. I'll update when I hear back from the sellers and find out what our final destination with this is.
Posted on 9/12/22 at 11:41 am to WhiskeyThrottle
quote:Of course she does...higher sale price = higher commission.
I am waiting to see what my agent does. I don’t feel like arguing for a higher valuation since it may only work in my favor being low.
We bought our house from a family friend and he dealt with getting the lawyer to draw up all the legal stuff. He was in a similar situation as you are where he didn't care if he moved or not. We got the house inspected and his attitude towards it was if there was too much to do (and we insisted all of the items be fixed) that he'd back out. In the end he fixed about 75% of the things and we moved forward.
Frankly the only issue we had was that we were/are the "big house on the block". A house with smaller square footage a block away is now selling for 150% of what we paid for our house. In this market anything is possible (until it completely crashes yet again).
Posted on 9/12/22 at 11:46 am to WhiskeyThrottle
quote:
From what I understand, the appraisal sticks with the property from this time forward
I don't think so. How can one person's opinion as to what the house is worth "stick with the property"? Appraisals don't have anything to do with the seller or the sales price, it only has to do with Buyer's lender. Seller and Buyer had a meeting of the minds that the property was worth the purchase price in the contract that they signed. Buyer's lender won't lend unless appraisal comes in a certain amount.
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