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So, the seller of a property we put a bid on has rejected the appraisal our bank performed and said that we have to bring more money to the table. Unfortunately, we can't afford to do that. The seller has said that if we can't make up the difference between our bid and the appraisal (~$15k) they'll put it back on the market. Nothing has been written yet.
Isn't the ball still in their court? Shouldn't the process be they can order a new appraisal if they're unhappy with the one our bank did? Say they do decide to put it back on the market, that's $1000 that we sunk on an inspection and appraisal. Is there anything we can do to recoup that? What happens to our earnest money in this case?
The appraisal wasn't for the seller. It was for your bank in determining if they will give you a mortgage. The seller doesn't have to "reject" or "approve" anything. As to what happens now that should be determined by your contract. What does it say if the appraisal is less than the purchase price?
Have you or your agent instigated an appraisal audit and review with your lender? The lender has the opportunity to let them know the appraisal isn't satisfactory because of this, that, and the other. Your agent would then submit evidence as to why the appraisal is inaccurate.
As above, the seller isn't rejecting anything as it's nothing for them to reject. What your seller doesn't know is that appraisal is on record for several months so if they get another buyer, and that buyer's lender has an appraiser go out, that appraiser will see the report already done on the property.
And yes, if your contract says you can terminate because of financing because of an appraisal, you lose the money you've invested as that's not the seller's fault. Why should they owe you anything. The money you have invested is part of your due diligence prior to buying the property.
What your seller doesn't know is that appraisal is on record for several months so if they get another buyer, and that buyer's lender has an appraiser go out, that appraiser will see the report already done on the property.
I've never heard of this before. The appraisal goes on record where? I have a good friend who's an appraiser. I'll have to ask him about this.
I've never heard of this before. The appraisal goes on record where? I have a good friend who's an appraiser. I'll have to ask him about this.
Each buyer gets a loan number tied to that property and tied to the appraisal through the lender. When a new buyer comes in, they can see there was another buyer on the file. I don't know the ins and outs of the appraisers' system, but I've been told by many appraisers that they can see previous appraisals within a certain time frame.
I've never heard of this before. The appraisal goes on record where? I have a good friend who's an appraiser. I'll have to ask him about this.
Yes, it is true. The appraisal is tied to the home - makes sense - so you dont have wildly different amounts. Problem is for a seller like this - absent a reasonable variance - they are hosed.
Yep ... so basically, we informed the seller that unless they're willing to go down in price we'll have to walk because we can't bring an extra 15k to the table.
We also said that there's similar sales in the same development complex (it's a PUD) and the same floorplan that sold this year for 30k less than what the assessment was, so we think the assessment is actually being generous.
It's just damned unfortunate on all sides ... we went in full price thinking that another couple that spent 45 minutes looking at the same property as us and looking VERY happy walking out so we assumed we had to make an aggressive bid to get it ... then the bank hires an assessor that thinks otherwise ... and the seller obviously being just as frustrated as we are.
Lesson learned: ALWAYS negotiate the price unless you're in a white-hot market
It's a shame a willing seller and a willing buyer can't get a loan.
I know, I know....
I reviewed the financing contingency and checked with my RE agent. We'll get our earnest money back if we decide to walk.
I am almost positive the seller won't relent and they'll put it back on the market. Good luck is all I will say if they decide to keep it at the original price, what with an appraisal that's 15k less than the asking price.
They bought the place at the height of the bubble, so they're already losing 100k on it. Why an additional 15k is such a big deal I won't understand. They own another home in a nice area, and its not a short sale, so I know they have money. I think they're just being full of it. Oh well. When it sits around for months and months not selling, they'll maybe figure it out.
Or maybe the loose exhaust pipe leaked carbon monoxide from the hot water tank and corroded their brains ... that was a must fix item on our list which we didn't even need an inspector to find.
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... that was a must fix item on our list which we didn't even need an inspector to find.
