Home Buying in 19464>Question Details

Jessica, Home Buyer in 19330

My appraisal came back 15K under selling price

Asked by Jessica, 19330 Mon Nov 28, 2011

I put a 189K bid on the house, and the appaiser came back with 174K. So, the bank wants me to pay the different putting me 15K underwater. Is it advisable to ask sellers to reduce price to appraised price (they have been in house for 35 years, so I am sure they are not going to be in short sale by doing this).

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Hi Jessica,

You need to decide if the house is worth $189K to you - it must be to some extent since that is what you offered. However, I understand you not wanting to pay more than it appraised for. Have your Realtor look at the comps used in the appraisal to see if they 'make sense'. If they don't and you and your Realtor think the house is really worth $189K (meaning you think the appraisal is wrong), you can pay the difference if you are able and if you really want the house. However, if you and your Realtor don't think the house is worth $189K after you have reviewed the appaisal, you can see if the seller will lower the price or meet you somewhere in the middle. Also, just because the sellers have been in the house for 35 years does not necessarily mean they are not under water - they could have refinanced and pulled cash out of the house when the prices where really high.

Shanna Rogers
SR Realty
1 vote Thank Flag Link Mon Nov 28, 2011
You can challenge the appraisal to some extent. Review the comps that were selected to see if they are legitimate comps. Your agent may have to assist you with this step. Also determine if the appraiser checked the 'declining market' box for market conditions and determine if that response is in fact accurate for the neighborhood. You should also review if the appraiser is familiar with and hopefully near the immediate area of where the subject property is located. Many appraisers are pulled from locations far away from the subject home and are not familiar with the area and values, etc.
1 vote Thank Flag Link Mon Nov 28, 2011
you can also change it to a streamlined k loan and gain 10% on the appraised value by fixing something on the property. Maybe install new carpeting, or paint it. This is a unique aspect of both the Streamlined k and the Standard 203k products.
0 votes Thank Flag Link Sun Jun 2, 2013
I'd concur with a few of the responses you've already received. And, your Realtor should be advising you of your options as well.

If you had the assistance of a Realtor, they would probably have told you the options you have if the property didn't appraise for your offered amount. I've seen buyers get 2nd mortgages or using other lines of credit to come up with the difference as well.

Today, it's quite common for sellers to reduce their contract price to appraised price. I'd be surprised that the seller had an experienced agent on their side - unless at the time, the market was volatile and changing often.
0 votes Thank Flag Link Sun Jun 2, 2013
In many cases the buyer cannot come up with the difference. Do you have an agent? The buyer's agent many times will recommend asking seller to come down to the appraised value.
0 votes Thank Flag Link Tue Nov 29, 2011
What is your agent advising...you can try to negotiate with the sellers for the lower price, you can consider asking the seller to meet in the middle, you can consider to walk...your agent can better advise...
0 votes Thank Flag Link Mon Nov 28, 2011
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