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Hi. It's me again. I couldn't find a thread that answers this question but I suspect it has been asked many times. Could be my key words were incorrect! So here's the deal....
I received my appraisal back today on my new construction home. Home was appraised at 1K less than sales price. The total sales price includes my selected upgrades: granite counter tops, cabinets, master bath, extra half bath off recreational room, upgraded flooring, tray ceiling, etc.
For illustrative purposes:
Sale Price: $295,000
Amount after Down Payment: $265,000
Appraisal: $294,000
Am I OK or am I going to get a call saying I have to either 1) come up with an extra $1K or 2) remove an upgrade selection?
1) Talk to your builder. Tell them that the appraisal came back at $294 and not $295. Sometimes a builder will be open to writing up a new contract at the appraisal price. If you get stonewalled there and they won't renegotiate...
2) You may have to just come up with the extra grand. It wouldn't be optimal, but it is an option.
Hi. It's me again. I couldn't find a thread that answers this question but I suspect it has been asked many times. Could be my key words were incorrect! So here's the deal....
I received my appraisal back today on my new construction home. Home was appraised at 1K less than sales price. The total sales price includes my selected upgrades: granite counter tops, cabinets, master bath, extra half bath off recreational room, upgraded flooring, tray ceiling, etc.
For illustrative purposes:
Sale Price: $295,000
Amount after Down Payment: $265,000
Appraisal: $294,000
Am I OK or am I going to get a call saying I have to either 1) come up with an extra $1K or 2) remove an upgrade selection?
Thanks all!
I cannot imagine why the appraiser did that. That makes no sense at all
When I got home last night and reviewed the appraisal in more detail, the sale price listed in the 20+ page appraisal document changed to $293K. When I first got the appraisal all I saw was $294K and obviously I knew the sale price was $295K. I don't know when it changed to $293K or how he even got that figure.
When I checked my email this morning a contract amendment was waiting in my inbox for me to e-sign. Bet you can all guess why? Yup -- sale price was reduced to $293K. Had no idea. There was an explanation from my sales rep and that explanation tied back to the appraisal.
This freaking builder. I'm not complaining but I don't know what to think.
I can see there being a disconnect if the sale price was much, much more than $1K but yeah -- being that close I'd think the appraiser would bump it up a grand.
First you need to confirm your sales price. Confirm sales price. Confirm correct contract and options provided to appraiser. Worse case, you will need to shell out an additionalb$1000. Most builder contracts require the home appraise for just the base price, not the fully tricked out home.
I would think the bank would still approve a loan that came in at $1k difference, it's such a tiny percent in this case I am doing quick math and it would be like 0.33% of the sales price.
I would think the bank would still approve a loan that came in at $1k difference, it's such a tiny percent in this case I am doing quick math and it would be like 0.33% of the sales price.
Why would a lender loan more money than the collateral is worth? That's bad business. A lender will lend on the lesser of two things: sales price or appraised value.
I would think the bank would still approve a loan that came in at $1k difference, it's such a tiny percent in this case I am doing quick math and it would be like 0.33% of the sales price.
Not in today's world. Sure, buyer can proceed without the additional $1000 down, but now the OP's PMI is going to be double. I don't know where your .33% came from, but appraisal at sales price = 89.9% LTV and appraisal at $1000 less = 90.1% (95% PMI rate).
When I checked my email this morning a contract amendment was waiting in my inbox for me to e-sign. Bet you can all guess why? Yup -- sale price was reduced to $293K. Had no idea. There was an explanation from my sales rep and that explanation tied back to the appraisal.
Appraisal weirdness aside, it doesn't matter. The builder already reduced the sales price to the appraisal price.
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