FHA Appraisal (loan, approval, loan, law)

[jimlisa1020]

My wife and i have found a home that we wish to purchase. The seller wants asking price for the home, which we are willing to pay, as long as it appraises for the selling price or more. The seller has said that she won't sell the house for less, even if it appraises for lower than the asking price, which we think is ridiculous. Even though she seems very irrational, we still want this house really bad. I don't want to get the appraisal before the contracts are issues because we feel that if it comes back higher, she will ask for more money.

We are trying to find out how long it will take to get the appraisal done. Our bank has already told us they won't do it until a contract is signed, but i am wondering if it is done immediately after contract signing or is it done once the loan application is opened and the 45 day clock starts ticking. The reason I am concerned is because i would want to find out sooner, rather than later, plus we are planning on doing an FHA loan so we don't have to put as much down on the house, so we can keep equity from our current home sale.

does anyone know when the appraisal is typically ordered for an FHA loan?

Thanks for any help or suggestions you can offer while we try to deal with this irrational person.

[icibiu]

Originally Posted by jimlisa1020

My wife and i have found a home that we wish to purchase. The seller wants asking price for the home, which we are willing to pay, as long as it appraises for the selling price or more. The seller has said that she won't sell the house for less, even if it appraises for lower than the asking price, which we think is ridiculous. Even though she seems very irrational, we still want this house really bad. I don't want to get the appraisal before the contracts are issues because we feel that if it comes back higher, she will ask for more money.

We are trying to find out how long it will take to get the appraisal done. Our bank has already told us they won't do it until a contract is signed, but i am wondering if it is done immediately after contract signing or is it done once the loan application is opened and the 45 day clock starts ticking. The reason I am concerned is because i would want to find out sooner, rather than later, plus we are planning on doing an FHA loan so we don't have to put as much down on the house, so we can keep equity from our current home sale.

does anyone know when the appraisal is typically ordered for an FHA loan?

Thanks for any help or suggestions you can offer while we try to deal with this irrational person.

How are you doing on FHA loan if you currently own a home? It was my understanding that to qualify as a "first time" home owner you can't have owned a home within the last three years???


As for your question, we had our appraisal done about 30 days after the contract was signed. It was done after the inspection, you wouldn't want to do it before hand since you don't know if the inspection will find a deal breaker. By the time you get an appraisal done there will be no room for the seller to negotiate the price up since she will have already accepted your offer. BUT be advised that appraisers are being VERY conservative now a days and unless you are getting a great deal on this house at list price there is a chance it will not appraise for that amount. If this happens you havbe three options

1) Walk away (remember it's just a house there are a lot of others out there and this may not be the one for you, of course this is easier said than done)
2) Renegotiate the price with the seller to be more in line with the appraisal (but it sounds like this is not really an option in your case)
3) Put up a bigger down payment to cover the difference

I think it's also worth thinking about this from the seller's perspective. WHY is she being so irrational about price negotiations? Hmmm... In this climate my guess is she is about this --> <-- close to being in a short sale situation. If she lowers the price SHE may have to come out of pocket at closing, which she probably doesn't want to have to do. Or worse yet have to get third party approval which takes FOREVER (think 6 months to a year before you get your house!) Keep in mind that this could mean plently of other problems for you on this deal, if the inspection finds any problems she's probably not going to fix them/lower the price or give you cash to fix them. Think long and hard about if this is REALLY the MUST HAVE house, there could be another one coming on the market next week that could be better, cheaper and with a seller who is in a better place to negotiate.

[jimlisa1020]

FHA loans are not for first time home buyers.

The woman who owns the house does not have a mortgage. She is the orginal owner of the house and has been there for 40 years. There is not a short sale in this situation, just someone who is really stuck on a price. It's a weird situation.

[Annemieke Roell]

Originally Posted by jimlisa1020

My wife and i have found a home that we wish to purchase. The seller wants asking price for the home, which we are willing to pay, as long as it appraises for the selling price or more. The seller has said that she won't sell the house for less, even if it appraises for lower than the asking price, which we think is ridiculous. Even though she seems very irrational, we still want this house really bad. I don't want to get the appraisal before the contracts are issues because we feel that if it comes back higher, she will ask for more money.

We are trying to find out how long it will take to get the appraisal done. Our bank has already told us they won't do it until a contract is signed, but i am wondering if it is done immediately after contract signing or is it done once the loan application is opened and the 45 day clock starts ticking. The reason I am concerned is because i would want to find out sooner, rather than later, plus we are planning on doing an FHA loan so we don't have to put as much down on the house, so we can keep equity from our current home sale.

does anyone know when the appraisal is typically ordered for an FHA loan?

Thanks for any help or suggestions you can offer while we try to deal with this irrational person.

If I were you I would have a pre-offer appraisal done now. See if you can find an appraisal who does those. We do them at a little over the cost of a full appraisal.

The Seller would not know what the appraisal comes in at whether you have the house appraiser or your lender.

Please keep in mind that any appraiser who come up with "conservative" values is breaking the law and should be reported to your state's Board. We are bound by law to be a dis-interested 3rd party who are mandated to deliver an objective result, NOT an over or under valuation.

[rjrcm]

Originally Posted by jimlisa1020

... I don't want to get the appraisal before the contracts are issues because we feel that ifit comes back higher, she will ask for more money.

We are trying to find out how long it will take to get the appraisal done. Our bank has already told us they won't do it until a contract is signed, but i am wondering if it is done immediately after contract signing or is it done once the loan application is opened and the 45 day clock starts ticking. ...

does anyone know when the appraisal is typically ordered for an FHA loan?
...

As was mentioned, the appraisal reports belong to the person/lender ordering them and results not given to the seller. All they will know is if it appraised for purchase price or not. If it comes in low, then the buyer can decide to provide the report to the seller as part of negotiations to reduce price. You also can't get an appraisal done before contract that the lender will use. It would only be good for you in deciding what price to offer.

The appraisal is usually not ordered until after inspections are done, also as mentioned. However, it may take a couple of weeks to get the appraisal scheduled and done. If you are on a tight closing schedule, it may be better to order it sooner than later. Consult with your lender on how long they think it might take. However, it can't be ordered until the contract is signed and submitted to the lender.