In fact, the appraisal is not "short" or "low" unless it comes in below the contract price.. And then I normally say " congratulations" to my client because most contracts allows the buyer to go back to the seller and ask them to reduce the purchase price to reflect the actual appraised value. Of course, the seller can say " no." in which case the buyer can opt to make up the difference or walk away from the deal and get their deposit refunded.
You are entitled to receive a copy of your appraisal irrespective of the value along with a Declination Letter stating the exact reason for your denial. Where's your banker and attorney in all this? Are they MIA. There should be no reason for you to seek answers from the Trulia community on this issue when those two professionals are supposed to guide you through the mortgage process from preapproval to closing. Hold them accountable!
Should you require a second opinion on your purchase, please feel free to contact me directly at 917.699.0183 or via email at firstname.lastname@example.org.
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Senior Mortgage Loan Originator
NMLS License #24076
If the appraisal is low that means the bank is protecting themselves and you as well because it means you are paying to much for the property. Also a concern for the bank is if they give you the loan for a property that is over priced and down the line something happens and you cannot pay the mortgage any longer your property may be unsellable on the current market and both of you lose.
So if your appraisal is low that's a good thing because you will not over pay and you can simply ask your agent to negotiate a lower price with the seller in this case. Be mindful that the seller can agree or not so be prepared.
Be aware, the BIG BANKS are going to sell this mortgage to an investment group. They are not going to keep it. If the underwriting process suggests they can't resell your mortgage, or that the investment group has imposed limits, THE MORTGAGE WILL BE REJECTED and the reason will be whatever is most convenient.
Your agent told you this when it was suggested you use a preferred local lender or to have a plan B.
Some BIG BANKS will not allow the buyer to suppliement their pruchase offer with cash. The home must SELL for whatever the fiat appriasal states. Rarely do local lenders impose obstacles that serve to frustrate the buyer and seller and provide no benefit or protection to the borrower.
You should not allow your shadow to fall upon the likeness of a big bank. Find a local lender or credit union who actually invests in your community..and keep your business with them.
I'm interested regarding the origin of the initial expectation value to which you refer. Shed more details on the origin of this value. I'm seriros. I've been there when the 'big 'bank dude went to ZILLOW to obtain a value! This is who you are working with. I suspect the value to which you refer is meaningless and has no bearing on the mortgage whatsoever.
Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
yes they could. if it comes in less than the 80% value if its conventional, they can either reject, or offer you less money and you would have to put up the rest in cash, if you have it. or you can start all over with another lender. I had one deal the people went through 3 banks until it appraised.
This is a good question for you to ask Wells Fargo so that you hear it firsthand. I would think that as long as the appraised price is at or above the sale's price then it should be no problem. Expectations are just conjecture as you say that the property did appraise above the agreed upon sale's price.
Prudential Connecticut Realty