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Ok, I have an offer on a property where I'm supposed to be at the closing table right now. Bank having issue with the appraisal, and while I'm considering ordering a new appraisal, it obviously will not be completed by today.
Yes, I have the typical contingent upon financing, in the contract, but what I want is more time, not my money back.
Whats your experience with sellers (bank repo) when contracts need extended due to a bad appraisal?
If appraisal didn't meet contract price, doesn't that make the financing fail?
What written notices, if any, have you given the Seller?
Why don't you try to get the appraised price on the property?
Appraisal came back on time, we just didnt see a small line on the appraisal stating that the property needs $50,000 in repairs, in reality it needs $5,000. Banks are not wanting to finance a "rehab" project, even though its not one. I gave the sellers agent a copy of the appraisal when I told him we couldnt close in time and he was as floored as we were over how far off it was.
The appraisal shows, as completed value $191,000, $50,000 in repairs, = $141,000 current value. While the $141,000 is more then the purchase price, (and we're putting 20% down), banks are looking at that over inflated $50,000 in repairs.
Reality is the appraisal should have showed $191,000 with $5-$10,000 in repairs, meaning a minimum final appraised amount of $181,000, not $141,000.
We're taking it to another bank, who after I took photos of the property showing that primarily its one bathroom and carpeting that needs repaired (photos at 5155 West Boulevard ) , are now reviewing the loan and says they will do it, but we did not close in time, so I wonder what the sellers will do.
Just wondering what the recourses are because I still want the property.
you need an addendum extending the closing date or a new offer.
Can't you get the bank to ask the appraiser to fix the clerical error quicker?
Ok, those are the routes I'm taking, I'm even ordering a backup appraisal, which I wont get done, unless the appraiser fixes the error. (I'm not exactly sure its a clerical error), just think they have no clue about what it cost to install carpeting and a toilet..
Ok, those are the routes I'm taking, I'm even ordering a backup appraisal, which I wont get done, unless the appraiser fixes the error. (I'm not exactly sure its a clerical error), just think they have no clue about what it cost to install carpeting and a toilet..
It is an awful experience for you and the seller, both want to close but can't. I have experienced a case in which the buyer got notice 1 day before closing that there was something wrong with the appraisel. Buyers had everything put in their name and were ready to move in and had 2 days to move out of their rental place. It was a very nerve wracking time, but we managed, and learned from it, that ever since I want an appraisel done within 2 weeks after signing the contract (if contigent on appraisel). Since the appraiser made a mistake, the appraiser should be responsible if the seller is taken another step (legally). Even in the best market a seller didn't have another person waiting to close within days so don't worry the property won't go any where. Stay calm and have the appraiser (first one) pay for the extra costs.
Good Luck and sleep well, this is a hurdle that can be overcome but can be stressful.
It is an awful experience for you and the seller, both want to close but can't. I have experienced a case in which the buyer got notice 1 day before closing that there was something wrong with the appraisel. Buyers had everything put in their name and were ready to move in and had 2 days to move out of their rental place. It was a very nerve wracking time, but we managed, and learned from it, that ever since I want an appraisel done within 2 weeks after signing the contract (if contigent on appraisel). Since the appraiser made a mistake, the appraiser should be responsible if the seller is taken another step (legally). Even in the best market a seller didn't have another person waiting to close within days so don't worry the property won't go any where. Stay calm and have the appraiser (first one) pay for the extra costs.
Good Luck and sleep well, this is a hurdle that can be overcome but can be stressful.
Thanks.. I dont ever lose sleep over these things. I understand that I pay people to do their jobs, and the bankers only get paid if their job is completed, (i.e. at the closing). They have a nice incentive to get it closed..
The gf though, she looses way to much sleep worrying about these things.
Just explain the situation to the seller and get an amendment to extend the closing. Then get the clerical error corrected, and you should be ok. But do make sure you cover the base with the seller.
The house needs some updating based on the photos. I see some missing tile work, hanging wires, etc. I would call it more of a cosmetic fixer, than a true rehab project. Nothing glaring in the photos. Nothing obvious that it would make it not lendable, especially at so far below market. I think the appraiser must be including some cosmetic costs in that $50,000 amount, but even that seems really high.
Typically a second appraisal would be ordered and an extension asked for.
You should request an extension and either have the original appraiser fix the report (if it was a typo or other error) or order a second appraisal.
I had a "first time, not closed on time!! now what?" moment this past week, too! I have a cosmetic fixer was supposed to close on Friday and it got delayed and then on Monday I was told that my financing fell through. Fortunately, my broker was able to secure funding for me by Monday afternoon and I was able to close on Wed. It was a very stressful week for me.
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Buyers had everything put in their name and were ready to move in and had 2 days to move out of their rental place. It was a very nerve wracking time, but we managed, 
and learned from it, that ever since I want an appraisel done within 2 weeks after signing the contract (if contigent on appraisel). Since the appraiser made a mistake, the appraiser should be responsible if the seller is taken another step (legally). Even in the best market a seller didn't have another person waiting to close within days so don't worry the property won't go any where. Stay calm and have the appraiser (first one) pay for the extra costs.
