Paying appraisal difference in Cash (Sugar Land, New Territory: sale, real estate, apartment)

[Carblover234]

We put a offer at a house and applied for the loan . The lender did the appraisal valuation and the amount came for the house was $12,000 less than selling amount. Now seller agent wants us to pay that amount in Cash and sell the house on papers for the appraisal value.
What do you think ?What are our options? The house is in SugarLand.

[debildeb]

Two things:
1.)
Ask the seller to meet in the middle. You can pay the 6k and they will lower the price by 6k.

2.)
Ask to see the appraisal? Are you really paying too much? The appraisal is there to protect you from overpaying... although silly... but do you really think the house is worth that? If yes, why didnt it appraise. Was it SQF? No relative comp? Really try to work with your mortgage company to get it better and improved upon.

Best of luck, there was an article in the chron about this... and we just faced it. We decided to challenge the appraisal. We found pocket listings, showed relative comps near by, etc. We have now found that two additional pocket listings sold for WAY over what we paid! Good luck!

[Failed Engineer]

Where exactly is this house in Sugar Land?

Your agent should see if they can help get the appraisal up.

[Carblover234]

Thank you for your reply.
The Seller agent sent us and the lender CMA report showing that the house is in the middle range of what have been sold there. The house is nice we like it. but another problem is that we have already break our lease and pay our apartment owner the penalty to move out next month as that was expected to be closed by 12th of august.

The seller is one stubborn person who was not even willing to pay for repairs but after that he paid. so asking seller for come in the middle part is beyond my expectation that he will do anything like that.

[Carblover234]

New Territory

[Jonathz]

who's the lender and what's the price range of the house ? Is it a conventional loan ?

[Carblover234]

A small Saving bank and the price range is $240 k - $256,000. Yes it is a conventional loan.

[Jonathz]

This is a popular price point for houses in New Territory. I think the lender appraiser is too conservative. Sometimes, the appraiser is not even from the local area and therefore have a different standard, and that's why the appraisal value come up short. You can work with the bank appraiser and your real estate agent to see what can be done to raise the appraisal value, or ask the lender if you can use a different appraiser. If you have the cash, you can pay up the difference at closing, and no need to modify the sale price. All the bank care is about the loan amount, and loan ratio. Otherwise, you might want to work with another lender, but it will delay your closing. If you are using a mortgage broker for the loan, you should ask for his advice. It sounds like the seller is pretty adamant about the sale price, may be he already paid off the house, and he can wait for another buyer.

[ftbend06]

Originally Posted by debildeb

Two things:
1.)
Ask the seller to meet in the middle. You can pay the 6k and they will lower the price by 6k.

Best advice I've seen so far. Maybe the appraisal is too conservative, but this is probably the best deal for all involved. That is unless they really aren't that motivated to sell. Otherwise, they will face the same issue with another buyer unless they're bringing a lot more cash to the table. You could try to get a second second opinion, but you'd be rolling the dice with hundreds of dollars. Perhaps everyone could compromise a little... If they're willing.

[Sross]

Originally Posted by debildeb

Two things:
1.)
Ask the seller to meet in the middle. You can pay the 6k and they will lower the price by 6k.

Agree this is the best option. Seller is trying to avoid paying taxes on the $12,000. You might tell them you would go $6,000 cash, but $12,000 (or anything above $6000) would be on paper.