Home Buying in Ridgewood>Question Details

Alex, Home Buyer in North Haledon, NJ

If the appraisal report is below sale price, what is the usual next step?

Asked by Alex, North Haledon, NJ Thu Jun 26, 2008

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Hi Alex,

You might consider if it is wise to overpay at this point. Of course you are probably emotionally involved with the house right now. But you should probably take a hard look at the appraisal and determine if it indeed makes sense. If it does, I'd push hard for renegotiation of the price or walk away. Now is NOT the time to overpay. If you need additional help, contact me via my website.

-Marc
Web Reference: http://www.marcpaolella.com
2 votes Thank Flag Link Thu Jun 26, 2008
I WOULD NOT RECOMMEND MY CLIENT TO PURCHASE A HOME THAT IS NOT WORTH IT!
THE BANK APPRAISAL IS THE ONE TO DECIDE HOW MUCH THE HOME IS WORTH.
SOME TIMES A 2ND APPRAISAL IS DONE BUT STILL THE BUYER HAS TO GET THE MONEY AND THE BANK ONLY APPROVES THE APPRAISAL DONE BY THEIR OWN APPRAISAL COMPANY. THIS HAS HAPPENED A FEW TIMES TO ME IN THE LAST 2 YEARS AND EACH TIME WE MOVED ON TO ANOTHER PROPERTY. WE DID GIVE THE SELLER A CHANCE TO ADJUST TO THE PRICE FIRST. STANDARD REAL ESTATE CONTRACTS DO INCLUDE A CLAUSE THAT AFFECTS THIS AND SAYS THAT THE CONTRACT IS SUBJECT TO THE APPRAISAL AND YOU CAN WALK AWAY FROM THE DEAL , OF COURSE YOUR ATTORNEY HAS TO MAKE SURE THAT THE CONTRACT YOU SIGNED ALLOWS FOR THIS! GOOD LUCK AND HOPEFULLY YOU CAN NEGOTIATE THE SELLER TO ACCEPT THE FACT THAT HIS HOUSE IS NOT WORTH WHAT HE WANTS AND THAT THE SAME WILL HAPPEN WITH THE NEXT BUYER! EVEN IF YOU WERE TO PURCHASE A HOME CASH WOULD YOU PAY MORE THAN WHAT IT IS WORTH? FOR MORE INFO FEEL FREE TO CONTACT ME! mia@villonrealty.com
1 vote Thank Flag Link Fri Jun 27, 2008
Hopefully you are using an attorney. Check if you have an appraisal clause in contract or if your attorney put one in. (I have this added in just about every contract where I represent buyer) Depending on how much you are putting down it may not effect your ability to get mortgage. In any event, use it to request a reduction to appraisal figure. You may not have any legal recourse though if you are putting a lot down and didnt have the clause in contract.
0 votes Thank Flag Link Thu Jun 26, 2008
Usually what happens is one of 3 things, 1. you can negotiate the price again 2.you can just pay the difference or 3. cancel the deal if you cant come to an agreement. Usually banks will not loan you the money if the Appraisal came back short
0 votes Thank Flag Link Thu Jun 26, 2008
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