Post # 1
is it possible? I know the mortgage/lender won’t loan us more than the appraised value but we still want the property. The seller is only willing if we pay an additional amount which we’re fine with. Can we do this?
Post # 3
We had this happen with us: The appraised value was $15K less than the agreed upon sale price. Our mortgage lender wouldnt budge so our options were to negotiate with the seller or walk away. Luckily, they came down and we reached a deal. Good luck!
Post # 5
@mnp: Appraisals are supposed to represent market value. However, I would imainge there are a lot of other factors than just square footage of the home and size of the lot that factor into appraisals (I’m not an appraiser or a realtor, have worked with property and land use for 10 years) Things like schools, proximity to work, nearby amenities-I suppose those things could all have influence on an appraisal. Unless you REALLY want the home, I’m not sure I would pay much more than the appraised value.
I’ve actually never seen this situation. But I live in an area that wasn’t part of the housing “bubble” so I didn’t see huge swings in valuations of homes and bidding wars and the like.
Post # 6
My lender said that we “couldn’t” – but I imagine if they didn’t loan more than the appraised value, it could be doable. I, however, would not want to do this since I wouldn’t want to feel like I was getting ripped off by paying more than the house was technically worth.
Post # 7
The appraisal was 10K less than what the seller wanted. He is willing to part with it if we gave him $3k on top of the appraised value. Since this property is really affordable, we’re ok with this.
Do you know if this can be written in the same purchase and sale contract?
As for professional advice, our RE attorney is kind of MIA this morning so I thought I’d ask the Bees.
Post # 8
You can still do it, but you would have to pay the difference up front. This happened to friends of mine and they agreed to pay the difference between the appraisal and sale amount in their own cash. Personally, I would walk away from the deal because I’d feel like I wasn’t getting a fair deal and I’d prefer to use that cash elsewhere.
Post # 9
Hi, I’m an atty who does real estate work. If your appraisal is below the purchase price, you need to ask your atty to negotiate with the seller’s side to amend the contract and lower the price. Otherwise, you can rebut the appraisal. I don’t know why the seller is demanding 3k more when he priced the home at higher than its appraised value. So for example, purchase price is 150k but appraisal says 140k, you should get the seller to meet you halfway and lower the price to 145k.
Post # 10
- Wedding: October 2011 - Bed & Breakfast
You can pay the difference betyween your loan amount (the appraised value) and the actual sale price in cash (money that is in addition to your down payment and closing costs). Since it’s “only” $3k in question here, I would entertain the possibility if I desperately wanted the house and could afford to part with an extra $3k. As an alternative, you could ask the real estate agents to reduce their commissions by $3k to make up the difference. Then the seller would be gettiing an “extra” $3k because he/she would not be paying it out in commission fees.
Post # 11
For 3 grand I would do it. 10? Probably not, but over the life of a mortgage, 3 thousand dollars is chump change if it really is the perfect place.
Post # 12
From my understanding you can, but you would need to have that $3k in cash, not as part of the loan.
Post # 13
@mnp: it’s possible if you come up with the extra money… I would not pay more than the appraised value though. I think renegotiating with the seller is your best bet
Post # 14
i personally would never purchase a home for more than appraisal value. i consider homes as investments and would not want to lose out on that overage i paid when i go and sell it.
if this a permanent home, $3k isn’t too much if it’s everything you wanted and you have nothing to do it.
@mnp: have you had your home inspection on this house?
Post # 15
for 3k i would do it – but not for 10. It doesn’t change the sale price of the house. It just means that your down payment has to be 3k higher because the total loan amount can’t be more then the appraised value.
Post # 16
I would probably look at it as an extra 3K you managed to lop off your mortgage early 😉
If you really want a home, 3K is not much to pay extra. I wouldn’t 10K though 🙂