Lender and Realtors unresponsive during appraisal contingency (condo, mortgage)

[Bankarow]

Hello
I'm new to this forum and hope its ok to ask for advise regarding what to do

I put in an offer to buy a small condo through a realtor and we are at the appraisal stage. But the lender's loan officer was slow to order the appraisal because they did a desktop appraisal first and the value came in low, so they were hesitant to do a full appraisal. They eventually proceeded to a full appraisal but very slow and have not given us the full appraisal back for over a week and a half yet despite numerous requests by me (and realtor) to obtain the appraisal back in time before expiration of contingency appraisal deadline. ..... which was Yesterday because we extended it by a week from initial contact date, to yesterday (Saturday 13/03/2021)

Before it expired yesterday, I insisted that my realtor quickly request for a second extension which he did but he told me it wasn't guaranteed because we had already asked for one extension already .

Can a seller actually refuse a second extension request if made before the expiration of the first extension deadline as i had insisted?

And is the lender culpable for late appraisal? I had warned against a late appraisal and the lender yesterday told me that basically it was my realtor's responsibility to get an extension and not her fault if appraisal come in late.

I wonder what happens if the seller refuses the extension request as my realtor hasn't gotten back to me and seems to be avoiding my calls and emails, but told me he put in the extension request yesterday before the deadline.

And do i have any recourse if i'm told that the seller did not accept the second appraisal extension request and is the lender and realtor off the hook? The realtor (and even closing conpany )was recommended by the lender, and perhaps i shouldn't have been using them in the first place

Thanks

[mom2twinboyz]

Yikes. Its a tough market and it is not uncommon for appraisals to be backed up. Really the first thing a lender should order when they get the accepted offer. No they do not have to accept the second extension but you would have to decide to back out before the first contingency expired should you want to walk without giving up emd. But seeing they are so far along in the process I doubt the sellers would say no then they'd have to start from square 1. Really not in their best interest. Good luck!

[Bankarow]

Thanks for your response

The problem is i can't back out without losing emd since i need the appraisal to back out and still don't have it yet.

I am very unhappy with this lender and want to ask what to do if the appraisal eventually comes in low as i suspect it will. I am told i have to proceed by making up the difference but not sure how it works

Lets say the original mortgage was for $85,000 and the appraisal comes in at say 82,000 instead of $85,000, am i going to pay $3000 difference and then 20% deposit on the $82,000 appraisal (NOT $85,000 original mortgage)?

Can the lender change the interest rate based on lower appraisal?

And can i decide to ditch the lender and opt to pay cash or some alternative financing? I don't know if i will be penalized as i signed some docs and i have saw something about commitment fee but i didn't see any figure in their document even though i searched.

[mom2twinboyz]

Are you still in the financing contingency? If so that could be your out. So right now if the appraisal comes in say 3k lower for example you can ask seller to pay difference, you can pay the difference or you can split it. The seller doesn't have to agree to anything though regardless of if it before or after expiration. )That is why it was so important to get an answer before the contingency expired. Good luck. Hopefully it comes in fine. P

[Bankarow]

Thank you We are outside the financing contingency and i didn't think to ask the Realtor to extend. I was so focused on the appraisal and the realtor never thought to extend the financing contingency also. I can only hope the answer comes back that the seller agreed to the extention i asked to be put in on Saturday. I am hoping that since i asked for an extention before the expiry on Saturday ......and i didn't hear a denial back from seller, i can consider that to be an acceptance? Thanks again.

Read more: https://www.city-data.com/forum/atla...ntingency.html

[ATL Golfer]

The problem you have is the loan amount. The lender does not care about this loan. I have sold many properties in the $100k range and this is always an issue. As SELLER I am on top of the lender.

The next item your lender will sleep on is getting condo approval (another layer above and beyond what they do for a single family purchase). Your lender will need to order a "Condo Questionnaire" in order to receive condo approval. Make sure that has been ordered and request proof it has been ordered. I have had countless closings pushed back because the questionnaire was not ordered.

[mom2twinboyz]

Yep lender simply doesn't care. You are right. It is amazing how many lenders simply disregard the time limits on contracts. Usually I'll check with lender before submitting an offer and sometimes they still don't care. They'll say you can use the 8 day extension. But try telling that to a seller who has their own place to close on.. It is so important to be on the lender. Even then some just will do what they want to do and work on their own timeframe. I'm surprised agent recommended this lender. Maybe it is just a funky time for them.

[Chas863]

Originally Posted by Bankarow

Thank you We are outside the financing contingency and i didn't think to ask the Realtor to extend. I was so focused on the appraisal and the realtor never thought to extend the financing contingency also. I can only hope the answer comes back that the seller agreed to the extention i asked to be put in on Saturday. I am hoping that since i asked for an extention before the expiry on Saturday ......and i didn't hear a denial back from seller, i can consider that to be an acceptance? Thanks again.

Read more: https://www.city-data.com/forum/atla...ntingency.html

No. Lack of a response is not the same thing as an affirmative response.

From what I tell from your situation (and it's not totally clear to me), it sounds like you don't have a contract at this point because a contingency that needed to be met by a certain date was not met. Therefore, you don't have a contact.

Trying to blame the lack of receiving an appraisal value on a lender, is not a valid excuse for not meeting a contingency unless the contract specifically says that it is. Pointing a finger of blame at the lender, appraiser, or anyone else may make you feel better, but it does nothing to change the contract terms unless the contract specifically says that it does.

So, as I see it, you have no contract at this time and should be entitled to the return of your earnest money if you did everything you could in applying for a loan in a timely manner. If you still wish to purchase the house and the seller still wishes to sell you the house, then perhaps an addendum could be signed by you and the seller which would reinstate the contract (perhaps with some modifications) and waive the provision(s) that caused the voidance of the contract in the first place. If this can be accomplished, then you can continue with the transaction. Otherwise, just get your deposit back and start looking for something else.

[mom2twinboyz]

@Chas nope I believe you are incorrect. I am an agent and it is my belief it is still an enforceable contract. Thr only difference is if the buyer backs out because appraisal was too low they can't get EMD back. Someone can correct me if I am wrong. The agent should have had everyone agree to the extension on time but I see time and time again lenders ignoring deadlines on contracts.

[Bankarow]

My realtor told me we have a binding agreement once i signed the offer and it was accepted. The problem is the low amount and the lender didn't even want to go forward with appraisal when the desktop came in low as they were convinced the full appraisal would also come in low.

I have agreed to "bridge the gap" if appraisal comes in low but not too sure how it works and would like to ask

Lets say the original morgage from lender was $75,000 and final appraisal comes in at $70,000, i understand i will put additional $5,000 down to "bridge".

I don't know what happens to this $5,000. Is it added to the downpayment and then my outstanding loan will be based upon $70,000? i.e, I will be putting downpayment of $14,000 + $5,000 =s$19,000? And this downpayment is deducted from $70,000 appraisal? So I will be repaying back $70,000- $19,000? = $51,000?

Or will they be basing my loan on $75,000 and so my downpayment will be deducted from $75,000? ($75,000- 19,000 = $56,000)?