Home Buying in 78759>Question Details

Bjwright98, Home Buyer in 78759

Can real estate agent ask for $2000.00 cash to lower house sale to appraised value?

Asked by Bjwright98, 78759 Sat Aug 21, 2010

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21
Hi,

There are a few options....you can ask for a $2000 credit for closing costs. This allows you to keep $2000 cash that you might have brought into escrow to close. If not....you can also ask the sellers to reduce the price of the home in an addendum.

Your lender is not going to want to see a cash refund by the seller.....so look for ways to get the money another way.

Good luck with your purchase,

Karen
1 vote Thank Flag Link Sat Aug 21, 2010
I would recommend asking the sellers to come down $2000 in price, or contribute $2000 more to closing costs (if applicable - you'll want to talk to your lender to see if that is even a possibility). Your Realtor should be able to answer these questions for you, along with your lender.
0 votes Thank Flag Link Wed Aug 28, 2013
Without more details on this purchase it is difficult to determine what your really asking. It seems that your asking if you the buyer can ask the seller to reduce the price by $2000, since the banks appraisal came in $2000 less than the contract price. Yes, you can absolutely do that. The key is lenders are not going to loan the buyer more than the appraiser says its worth. I wish you luck!
Sincerely,
Betina
0 votes Thank Flag Link Thu Mar 21, 2013
Did the real estate agent really ask for the $2K for him/her self? It sounds more like a mortgage 'buy down' where you pay a bit extra down in order to get a mortgage at a lower rate. It's hard to say with so little information, but it sounds like the appraisal came in $2K under what was accepted as the sale price on the home. I'm not sure where your agent is coming from, but possibly, he/she is basically having you 'give' the buyer the $2K so that they can put down a larger down payment, thus bringing the transaction more into alignment for the lenders so they will approve the loan.

Didn't you ask them why the $2K and what they were going to do with it? I think that's what I would do.
0 votes Thank Flag Link Wed Aug 29, 2012
Your question is complicated. No there can be no "side" deals. Everything that is involved in this transaction must be on the HUD. By your question, I believe you are talking about CASH changing hands. This is not allowed.
0 votes Thank Flag Link Thu Nov 10, 2011
Sure. Anyone can ask for anything, ultimately.

In this particular situation, you simply need a skilled negotiator to get you through this to ensure you get not only a great home, but at a great price.

The last thing you want to do in this market right now, is over-pay!

If you are not under a current representation agreement with a Broker, send me an email with the address you want to purchase and we can chat.

If you are under representation, ask your Agent to seek additional counsel through his/her resources and uncover strategies and techniques that will serve your best interests and your bottom line.

Shawn Monshaugen
Keller Williams - #1 Selling Broker in Austin
512-330-1075 http://www.ShawnMon.com
Web Reference: http://www.ShawnMon.com
0 votes Thank Flag Link Mon Aug 23, 2010
Your question is not a simple question to answer. An ethical and dutiful real estate agent knows he or she is not the principal and must consult with the Buyer or Seller he or she represents before popping-off an answer to the other side of the transaction. Frequently, residential real estate transactions are emotionally charged and I've learned in my 35+ years of experience to present the options to my client because it is ultimately my client's decision--not mine. For example, when representing a Seller I might say something like this:

(1) On the one hand, you can do nothing--stay firm on your Sales Price,
(2) On the other hand, you can agree to reduce the Sales Price and proceed with the transaction, or
(3) You may prefer to seek some middle ground.

Since each real estate transaction has many facets and variables that may affect the answer to your question and the middle ground might entail any one or more of the following examples:

(A) Prior to the appraisal being delivered, has the Seller agreed to pay for any costs to close for the Buyer as an incentive to help the Buyer purchase the Property? If the Seller has already agreed to pay such expenses, it may prove difficult for the Seller to further reduce the Sales Price of the Property. Nonetheless, the Seller must make that decision. The Seller may be highly motivated to sell and be willing to bring cash to the closing table, or not; it just depends on the situation. Who knows?

(B) The agents may be willing to help accomodate the parties to the transaction by reducing their fees. Who knows?

(C) Appraisals are simply one person's opinion. The Buyer may be motivated to purchase the Property and be willing to move the loan file to another lender and necessarily obtain another appraisal taking the chance that another appraiser could find the value. Who knows?

Negotiations are contengient upon all the various deal points and the emotions of the parties to the transaction.

If you would like to discuss this further, I would encourage you to go to: http://www.ListonRealtors.com - my personal website. There you may send me email. If you would prefer to cantact me directly, my celll phone number is in my Trulia profile.

Cheers,

Bob Liston
Broker/Owner
AVALAR Austin Real Estate Solutions
Austin, TX
0 votes Thank Flag Link Mon Aug 23, 2010
By the way, BJ, buyer's agents are typically paid at closing by the seller, even though we represent the buyer. It is a good idea to have an agent who is looking out for your best interest!
Cindy Crawford, REALTOR®
Keller Williams Realty-Lake Travis
(512)522-5002 Phone
(512)217-8990 Cell
(512)410-3531 Fax
1921 Lohman's Crossing #100
Austin, TX 78734
CindyCrawford@kw.com
0 votes Thank Flag Link Sun Aug 22, 2010
IF you decide to give the real estate agent $2000 prior to closing, you write a check (or get a cashiers check) and make it out to the title company (or closing company) that is handling the closing to put in their escrow account. If the deal doesn't close, you should have that money refunded. NEVER give cash to any of the parties involved!! Tim's answer below best explained how an ask price and differing appraisal price can still work.. Call me if I can help you, it sounds like you need a buyer's agent.
Cindy Crawford, REALTOR®
Keller Williams Realty-Lake Travis
(512)522-5002 Phone
(512)217-8990 Cell
(512)410-3531 Fax
1921 Lohman's Crossing #100
Austin, TX 78734
CindyCrawford@kw.com
0 votes Thank Flag Link Sun Aug 22, 2010
Since I don't have all the information, this answer may not be totally correct. However, the appraisal process is now very difficult to change the value of a property. The request for a title is sent to a company that has a list of appraisers that operates similar to a wheel. As the requests for the appraiser come in to the company it is given on the basis of which appraiser's name comes up. You nor the realtor nor the lender can change this. If a home appraises at $80K and the sales price is $82K, you can buy the home for the $82K and at closing the lender will require that the other $2K be paid to the seller. They will only lend on the appraised value of $80K. Under no circumstances should you give anyone money under the table. If discovered later on you could have your loan called in and you could lose the home.

Best of luck,
Tim Hunke
0 votes Thank Flag Link Sun Aug 22, 2010
Bjwright,
Once again we see how difficult it is to get an accurate & complete answer in a forum like this. The question you have posed leaves me wondering more than I think I know about this specific situation.

No where in this question do I see where you have gotten advice from your agent. If you are not represented by an agent please give me a call directly so i can answer your question in detail. You deserve a complete answer. The situation sounds, on the surface, a little suspicious to say the least.

Bill ~ 512-709-6343 ~ baustin.realtor@gmail.com ~ Team Price Real Estate
0 votes Thank Flag Link Sun Aug 22, 2010
Hi BJ,

I have to apologize....I misunderstood your original question. I think what they are telling you is that the seller is still planning to sell for $80,000. The lender will only loan a certain amount based on the appraised value....but there is nothing wrong with paying more out of your pocket.

I have had clients who have paid as much as $15-20,000 over the appraised value because they loved the house....nothing wrong with this. But make sure it's handled in escrow and through proper channels.....and only do this if you love the house.

Don't do anything under-the-table. Speak with your lending rep.....but I have never found a lender to care if you pay a bit more than the appraised value.

If you do decide you don't want to pay extra....I'm sure you have an appraisal contingency and will have the right to cancel, but make sure and read your contract and speak to your agent.

Karen
0 votes Thank Flag Link Sun Aug 22, 2010
BJ,

What a pickel. From your question and comments you must know something is not right. The problem is how do you get from here to what you want .. the house.

First .. Contact your lender and ask them if you can pay the seller the difference and have it show on the HUD1. That is assuming that you have the $2000 laying around. If this will not work then ..

Second .. Contact the agents broker ( anyone of us here would be glad to get their name and number for you ) and tell them your story. Then ask them to lower the commission that they are charging the seller so the sales price can be lowered the $2000. Tell them if they do not make the deal work then you will do everything in your power to get their license.

I hope you have something in writing from the agent like a email as mentioned below. If not then send a nice eamil to the agent repeating most of the offer back to them and make a small counter like asking that the $2000 be given to the seller one day before closing. Maybe that will get you proof of the offer.

Forget the attorney if you want the house. I don't think they can help you force the seller to sell to you the house because I can not think of anything in the contract that helps.

I wish you the best of luck. .. Bruce
0 votes Thank Flag Link Sun Aug 22, 2010
If the agent is asking for you to pay him/her the 2K directly and not the seller you should contact ABOR with a complaint. If the agent wants you to pay the 2K to the seller of the home, then either you have to pay the 2K or the seller and more commonly should have the sense to lower the sales price in order to help the transaction move forward.
0 votes Thank Flag Link Sun Aug 22, 2010
If teh house appraised 2k less than your sale price and you are getting a mortgage, the mortgage compnay will only loan off the 78k appraised price, you then should have asked them to reduce the price by 2k instead of you automatically being asked to pay an additional 2k. First of all any agent can not ask you for cash and demand paying it before the offical closing, hopfully you got the in writing as evidence to use against them.

A bank will let you pay 2k additional if you still want the proprerty but they have to know about it, any payments not disclosed to the bank is against the law. Your buyers agent should be guiding you, if you are buying aklone without an agent you may want to meeti with an attorney for teh first free meeting to get some guidance about what the law is.
0 votes Thank Flag Link Sun Aug 22, 2010
Trying to buy a home for 80k appraisal came in at 78K.......conventional loan. Agent representing seller will lower price to 78K if I give him 2k in cash so loan can go thru. Wants cash 2 days prior to closing and I want house.
0 votes Thank Flag Link Sun Aug 22, 2010
Hi BJ,

Your question makes it sound like the real estate agent would take the cash in exchange for lowering the price. I'm hoping that's not the circumstance since that would be illegal and unethical. If the answer to your question has been answered below, great. If not, please clarify what the circumstances are. Good luck!
Cindy Crawford, REALTOR®
Keller Williams Realty-Lake Travis
(512)522-5002 Phone
(512)217-8990 Cell
(512)410-3531 Fax
1921 Lohman's Crossing #100
Austin, TX 78734
CindyCrawford@kw.com
0 votes Thank Flag Link Sat Aug 21, 2010
GREAT QUESTION:

If the appraisal has been returned to the buyer via the lender $2K less than sales offer NO buyer can purchase via lender over valued.

It is up to property owner if their choice sell the home for less than executed sale offer. IF NO best keep looking.

Lynn911.com
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sat Aug 21, 2010
That all depends on what type of loan you are applying for.....What kind of loan are you trying to obtain (FHA,VA,Conventional)? What is the sales price and the appraised value of the home?
0 votes Thank Flag Link Sat Aug 21, 2010
HI,

I am not sure what you are asking.

Are you saying that the house appraised for 2K less than the contract price and you are now being asked to bring 2K more to the closing table? If that is the situation, there is nothing wrong with that solution. However, an alternate solution would be to ask the seller to accept 2K less for the sale, or to spit it. Depending upon your contract terms, these solutions may or may not be options. Your contract may speak to appraisal or mortgage contingencies, and the terms of your contract will guide the options.

If you are being asked to bring literal cash and make a side transaction that is not reflected on your closing documents, that is a very different circumstance. You should not participate in any side deals that are not reported on the HUD-1 closing docs.
0 votes Thank Flag Link Sat Aug 21, 2010
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
Can you please explain the situation in a little more detail?
0 votes Thank Flag Link Sat Aug 21, 2010
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