Post # 1
Soooo we’re 20 something days into a 30 day or less escrow. We should be closing before next Monday. I just got a call from our realtor that the appraisal value came in $5,000 under the asking price for the house. Our offer was for $5.000 over the asking price. So if we leave the closing price on the house the same as our original offer we’d have to come up with the $10,000 difference in cash. That’s not an option for us (since it would be in addition to the loan downpayment/closing costs) so our real estate agent advised us to submit a revisal to our offer, dropping the closing price to the appraisal value.
He said all of this as if it was great news and seemed like he just automatically expects the seller to accept the change. He said that it would be in their best interest since they already paid for inspections and repairs during this escrow process. If they reject the revision they’d have to place the house on the market again, go through all of this a second time, etc.
Has this happened to anyone before? How did it turn out? I’m really nervous!
Post # 3
- Wedding: October 2011 - Bed & Breakfast
Think about it this way… you may end up getting this house for $10k less than you expected. That IS good news. And your REA is probably right that the sellers will drop their price. The only reason they would probably have to refuse the price adjustment is if the new sales price would put them upside down on the house. Since the appraised value is only $5k less than list price, the likelihood of that being the case is probably quite low. So I’d venture to say that you will benefit from this development in the end.
Post # 4
@lovekiss: It’s a bank owned home so I’m not sure if that makes a difference? Thank you for the reassurance though! I agree that it would definitely be a very good thing for us if they accept!
Post # 5
@Running Elley: Let us know what happens!
Post # 6
This is good news. The sellers have very little resaon to reject the change to the appraisal value. As your realtor said, they’ve already invested money into this closing and future potential purchasers aren’t going to pay more than the appraisal value either so it really doesn’t benefit the sellers at all to put the house back on the market.
Post # 7
- Wedding: October 2011 - Bed & Breakfast
The bank is going to look at the bottom line. Every day that the foreclosure sists on their books is another day that they cannot foreclose on another property that is delinquent. So it is in their interest to let this one go, especially since it is only $5k under asking price.
Post # 8
Ours was bank-owned and the appraisal came in right at our offer (which was under the asking price0, but also said we absolutely needed to have a few repairs–mostly small, but one was a new roof!! We thought that might be the end of the deal, but the bank ended up paying for a whole new roof. I can’t guarantee a positive outcome, but these days banks want houses off the market, so hopefully they’ll drop the cost.
Post # 9
Banks let homes go way easier than people. You should be golden.
Post # 11
Was it a multi-offer situation? We are expecting to hear back about an appraisal today for a condo we’re purchasing. We’re on pins and needles! The bay area is so crazy right now – everything we’ve bid on has had 10+ offers, so we’re afraid that if this happens to us, they’ll just move on to the next bidder and hope their bank comes back with a higher appraisal instead of dealing with us 🙁
Post # 12
I had the same thing happen with mine and we either had to come up with the extra $5k or have the purchase price reduced. Thankfully, the seller took the reduction because we wanted the equity!
Post # 13
I think that as long as there aren’t multiple offers, the ba nk will approve lowering hte price to the appraised value. If they don’t, they’ll have to wait for a buyer who CAN afford to put the additional $10k down- which is a LOT of extra money. They’re this far in to the process, it seems unlikely that they’d cancel the whole deal over a $5k difference in price.
GOOD LUCK! Let us know how it goes.
Post # 14
Since it is bank owned I think it will work out for you guys.
My in-laws sold their house a few months ago. On the first offer, the appraisal came in really low, like $20,000 less than the contract. My in-laws read over the appraisal and disagreed with most of what was written. They were not willing to come down so the contract was voided.
They had another offer not long after and had someone else do the appraisal. The house appraised for about $20,000 more than the first time.
Post # 15
@MRSLMA: It totally depends on what market you’re in as to whether $10,000 is a lot of extra money. That’s a rounding area in the bay area market, but in TX where I grew up, it’s 10% of the total price of a house! With houses starting at half a million (for one in poor shape where I live) $10,000 would be expected to be brought to the table as extra money from the buyer, I bet.