What is your agent saying? What made you second guess your offer in first place? Subsequent conversations with real estate "experts" who are not licensed (Sorry, but i have found that many, many "experts" tend to come out of the woodwork whenever a consumer starts talking about a real estate purchase or mortgage financing. I cannot begin to recount the number of conversations I have had with borrowers after their uncle, neighbor, hair dresser, whoever; gave them their EXPERT opinion about mortgage financing).
I would suggest talking to your agent. The only way to know if you can cancel the transaction is in reading the original contract and knowing the translations from your agent and the selling bank. However, from what you have stated, I suspect you have your challenges.
Please be aware that appraisals are 95% empirical data and 5% pure finesse. I don't know the purchase price of the property; however, the lower the property value, the more likely there could be a 10% to 15% discrepancy. Getting multiple appraisals is somewhat like giving a loan package to three different underwriters: Everyone has an opinion. they may all approve the file; however, the list of conditions will vary from one lender to another. Best of luck
I'm guessing you have a financing contingency in your offer. If so, the mortgage company is saying that the property is worth enough to lend you the money. To oversimplify, it appears you've been approved for financing. If so, then the financing contingency will be removed . . . and so will no longer be there to let you out of the deal. Your Realtor can advise you further.
Just guessing here, but are you concerned that you'll have to borrow more because the appraisal come in for more than you'd offered? Let's say you offered $200,000 and the appraisal came back at $225,000. Are you worried that the bank is going to lend you $25,000 more and that that'll raise your payments? If so, that's not the case. (Unless Ann is right.) If you offered $200,000, it doesn't matter whether the appraisal comes back at $200,000, $225,000, $300,000, or $1 million. The bank will only lend you a percent of the purchase price. If you'd planned on putting 20% down, you still would only put $40,000 down and the bank would lend you $160,000. If you're going with an FHA loan at 3.5% down, you'd still only have to put $7,000 down and the bank will lend you the other $193,000. Even if the appraisal is for $1 million.
Hope that helps.
Also if you are dealing with a regular seller (not a short sale or REO) then that seller may not care that your appraisal came in lower and will simply sell the house to another buyer.
If the Seller's agent has already contacted your lender to verify your approval (it's her right in the typical florida contract) and you have been approved, you may not only lose your deposit if you fail to close but you may also be compelled to buy. It's called Specific Performance.
Good luck and let us know how it works out for you.
All the best,
These questions appear on Trulia where people have never asked a question before.
I wouldn't bother answering anymore, I am sure Trulia will pull it.
Please elaborate, what value did you expect, why is the value important and how does this value effect the decisions you must make?
As others have so enthusiastically stated. a high appraised value for a buyer's perspective home is the signal to do the 'happy dance!"
Nothing I like to celebrate more than an appraisal for any of my clients that comes out higher than the price we worked so hard to negotiate. Please do not dispute an appraisal because it is too high, rejoice my friend, rejoice. It certainly should give you celebration to close and should not cause any delays.
Know that the appraisal process is somewhat of a farce even with all of the government involvement and that appraisals still tend to end up fairly close to the purchase price. So again, if your appraisal was too high rejoice my friend, rejoice. And give your RealtorÂ® a big pat on the back!
I hope this information is helpful but if you need anything additional please do not hesitate to give me a call.
Always at Your Service,
Tom Priester e-PRO
"Results Driven Real Estate"
Keller Williams Realty
Seiss Real Estate
If the apraisal value comes in "high" you are in contract at a set price! Your deal is still the same. There
would be no change for you -except the knowlege that you are paying less than the property is worth.
It is in cases of a "low valuation " where the appraisal has an effect on the contract price,
If you are talking about the Sellers Bank valuation in a short Sale you offered a price contingent
on their "approval" if they " disapprove" your offer you're dismissed and not obligated to perform.! Let
me know if there's somthing else you are worried about! Best of Luck
You do understand that an increased value on a purchase means instant equity for the buyer, right? The purchase price does not go up with the appraisal at all. Please do explain to us your concerns.