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They give you $8000. so you can pay $16,000 more, and not appraise.
Posted under: Home Buying in Phoenix
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November 6, 2009 7:36 AM |
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3 comments
What is $16,000 dollars. For the average FHA home buyer in Arizona it maybe 10 to 20% of the value of a single family home.
This is what happened in the last few months before the Tax credit extension, and now that they have extended it (like we didn`t see that coming) here we go again......
Tax credit happy FHA buyers would run around town trying to out bid each other.
For a FHA Buyer to out bid another buyer or offer over asking price by $16,000 It really only cost a first time FHA buyer (3.5% down) an extra $560 down. Kind of like FREE money? Of course minimal additional funding charges will apply, and an extra $20 bucks per month.
So lets say you go down to Queen Creek and pick out a 3 bed, 1.5 bath 1400 sq ft home built in 2005. It could be a Short Sale or a Bank Owned. Sorry not many resales at this time.The asking price is only $80, 000.
WOW! nice house great deal.
I want it!... It`s only offered at $80,000.
Lets give them 90 no 95 no $96,000 dollars.
Contract is accepted. CONGRADULATIONS!
Quick let`s schedule our home inspection, pay $350. and our appraisal pay $400. before our 10 day inspection runs out.
Please Note: Some Realtors will wait for the appraisal before scheduling the inspection, considering the time it takes for an appraisal, there may not be enough time for a inspection before the inspection period expires. A little of a catch 22.
So Mr.& Mrs. First time happy home buyer are walking through the Home Depot picking out paint when they get a phone call from Mr. Mortgage broker.
The Home appraised at $75,000
Unless Mr. & Mrs. Buyer have an extra $21,000 to make up the difference, they will not receive funding.
Hey I am optimistic, however I doubt the Bank(s) or private seller will lower their price to the FHA appraisal. The Bank(s) or private seller will simply look for a conventional or cash buyer, which may or may not be able to obtain a higher appraisal.
FHA Appraisers and Conventional Appraisers have different guidelines for obtaining an appraisal.
Besides Mr.& Mrs. Buyer being heart broken, they are out $750. in inspection and appraisal cost. They May have had a better time in Vegas.
So this will really fall on deaf ears, because no one reads my blog. Listen to the Realtor you have, do the comps in the neighborhood.
If you think it wont appraise it probably wont.
It`s easier to spend a weekend in Vegas.
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Comments
When we get back into a normal market I will remember that. Thanks.
I don`t think it would work for a Short Sale, because those sellers generally don`t have the cash, and we never know when the bank if ever will return a call, I would also be hesitant to use that tactic in a bank Owned deal, because it would be to complicated for the bank to reimburse the buyer a check after the close.
Now if the buyers agent paid the inspection & appraisal?
That is a great question?
I think subconsciously I have heard a Realtor advertise " I will pay your appraisal" now I am sure there was a catch, I think the buyer had to use their mortgage broker.
However you have got me thinking. A buyers Agent who is worth their salt, even though they are not an appraiser has a very good chance of coming within 5% of the appraisal. Still not on the mark, however if they felt strong enough about the price, this would be a opportunity for them to separate themselves from the rest of the pack. Worst case scenario they just don`t write the contract, unless they want to give up the money.....Interesting.
Now the inspection? Well that`s why we have a BNSR, considering most listings in AZ state "seller will not make repairs" Myself as a Realtor I push to get the inspection done before the time runs out, especially on bank Owned deals. Again They are "AS IS" but you really never know what`s in the plumbing.
@NR
You`re right. I am going to step out and say most of those homes that say "Back on the Market" or "Buyer flaked out" are on their second inspection & appraisal. Especially if the listing reads, Conventional & Cash only.