Home Buying in 32258>Question Details

Janie, Home Seller in 32258

The lender asked for another appraisal and it came in below the purchase price. Now buyers want to renegociate. Can we carry back secured second?

Asked by Janie, 32258 Sun Dec 6, 2009

We entered into an agreement for sale of our home. The first appraisal was for more than the purchase price, the lender got another appraisal and that is below the purchase price. we are not builders. Buyers are getting an fha loan, we hear. Now buyers want us to split the difference between the lower appraisal and the purchase price agreement. We have offered to carry back, rather than reduce purchase price. What do you think?

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11
Hi,

If you are close, get your realtor to negotiate the difference and make it a sale. Don't loose a buyer in this market over what appears to be a small difference.

So, my advise is to get the deal done asap. Listen to your listing realtor.

Regards,
Blaine Rabe
Web Reference: http://www.blainerabe.com
1 vote Thank Flag Link Sun Dec 6, 2009
Now that the FHA appraisal has been done it is officially attached to the property through FHA as an official value for the next six months. So, splitting the difference seems like a GREAT idea for a seller. Basically means your getting the buyer to pay you more than the appraised value. The first appraisal was probably altered due to new sales being lower.
0 votes Thank Flag Link Fri Jan 23, 2015
Because the same compliance does not apply to FHA appraisals, it is hard to say why the lender asked for another appraisal. One reason could be if they were originally not going FHA, and the appraiser was not licensed to do FHA appraisals. Also, many bank underwriters do what is called an AVM to verify value, or sometimes even look on zillow, believe it or not. There are times where too many other lower sales show up, and the bank starts to question. What the buyer could do is see if they can get the appraisal assigned to another lender, and see what happens. Of course this is difficult to do, and could be costly to your buyer. If homes are declining in value as much as one of the previous realtors from your area mentioned, you might want to just reduce your price.
Of course I now just noticed that this is an old question, so what ever happened?
0 votes Thank Flag Link Mon Feb 1, 2010
My question is - Was the first appraisal one that you had done on the house before the contract? If so, you can't use that appraisal.

The lender's appraisal will stand, and if you want to sell the home (any time in the near future), you will need to accept the value of the appraisal. A lender is NOT going to lend money for more than the appraisal (no matter what buyer comes along), and rightly so with all the trouble the market is in because of bad lending practices of the past.
Web Reference: http://www.prchomes.com
0 votes Thank Flag Link Mon Feb 1, 2010
I am curious why the lender would ask for another appraisal. Usually if the lender questions the appraisal they will ask for additional comps to support the stated value. The purchase and sale agreement used by local realtors covers FHA financing and states that the purchaser is not obligated to complete the purchase if the appraised value comes in below a specified dollar amount (usually the agreed upon price) but has the privalege and option of proceeding. The FHA loan gurantee amount will be based on the appraised value so if the purchaser decides to proceed with the purchase as written they will have to have the means to pay you the difference in cash. I don't believe the FHA will allow a second lien but I suggest you consult with a mortgage lender to be certain.
0 votes Thank Flag Link Mon Dec 7, 2009
Sell for the lower appraised price--it is the only way an FHA loan will work.
0 votes Thank Flag Link Mon Dec 7, 2009
Janie,
This is unfortunate. However, the newer revisions of our NEFAR contract have all the types of lending needing the appraisal to be equal or higher than the purchase price.

General information regarding my experience with appraisals---Not sure when the first appraisal was taken, but as we are declining at about (roughly) 3% in some areas per month, if the first appraisal was taken over 6 months ago it would be invalid. If the first appraisal is taken within 3-6 months perhaps it can be taken into consideration--but in my experience the appraisal for the lender needs to be within 3 months.
The next issue is this---if you and the buyer do not come to terms, and the home goes back on the market, the appraisal (current) could indicate that the value of your property is in one of the greater declining areas--so the risk is a lower appraisal should another buyer come around rises.

I am unclear if you have a Realtor representing you, and if you do all of this becomes secondary and/or invalid as I would go with their professional opinion. The same would apply for the buyer. And, if you are doing this on your own I would consult a professional over going forward on your own. Please, again, consult your Realtor--and if you do not have one perhaps this is a good time to find one!
Web Reference: http://www.oneteamhomes.com
0 votes Thank Flag Link Sun Dec 6, 2009
Hi Janie,

As far as I know, FHA will not allow a seller carry back second.

Anna and Katherine are right, you need to discuss this with your realtor.

Best regards,
Elva
0 votes Thank Flag Link Sun Dec 6, 2009
FHA will not allow the buyers to borrower more than the home is worth. Your only other option is to call around a few different appraisers. An appraisal is subject to the appraisers opinion. Maybe you can find out what ill have a better opinion that works for you?
0 votes Thank Flag Link Sun Dec 6, 2009
What is Realtor advising you to do--I hope you have one.
0 votes Thank Flag Link Sun Dec 6, 2009
Dear Janie,

This is where your Realtor comes in. Ask him/her to explain your options.

Good Luck!

Katherine
0 votes Thank Flag Link Sun Dec 6, 2009
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