Home Buying in California>Question Details

TedM, Both Buyer and Seller in California

What is the price of the house? [I am stating just the facts of this situation and asking the forum for advice.]

Asked by TedM, California Wed Jan 30, 2013

House listed in Calif in Oct 2012 for $225K. One week after listing date, buyer offered $231K with FHA financing using a Real Estate Purchase Agreement (RPA) without an addendum. There were 6 offers over listing, so sellers asked for Best & Final.

Two weeks after listing date, during the Best & Final process, the same $231K buyer, via an email from his agent, increased offer to $235K with FHA financing.

However, after the Best & Final process, the sellers chose an all-cash buyer at $225K. One week later, the all-cash buyers backed out.

Sellers then went back to the highest offer at $235K. The buyer's agent processed a new RPA increasing offer price from $231K to $235K and added an addendum stating "If property appraisal comes in lower than agreed purchase price of $235K, then buyer will pay the difference between the appraised value and agreed purchase price up to a maximum of $3,500." Both parties signed RPA before appraisal.

Four weeks later, the appraisal came in at $206,000.

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Answers

2
IMO, the contract price is $235,000. The fact that the appraisal come it at $206,000 does not mean that is the new sales price. The seller is not forced to sell at the lower price. You will need to try and renegotiate the price.
Good luck,
0 votes Thank Flag Link Wed Jan 30, 2013
We are actually the sellers. And we agree with you Skip. We see nothing in that addendum that means we have to sell the house at 209,500. BUT the prospective buyers are dragging this out. They wanted Mediation - so we obliged and mediated last week. They 'went up' to 215K and we 'went down' to 225K. There was no resolution and I don't see why I have to! Now they are requesting Arbitration. We feel like our hands are tied and we HAVE to do all this nonsense when this is a non-issue... there is no THERE there. What a mess... Any advice?
Flag Thu Jan 31, 2013
Buyer,
An appraisal is an Opinion of Value, it is not a statement of absolute fact. Appraisals are done by people, some great and others are out of their area, out of their experience or just wrong. I have disputed appraisals and had adjustments made based on additional information I was able to provide. I've had second appraisals that have come in at the value I was expecting after the first one was low.
The Real Value of anything is generally described as what a willing and able buyer and willing and ready seller agree to do business with. For financing purposes, we have an additional opinion of value through the appraisal process.
It's hard for me to say what broke down in your situation, but as you describe it, multiple offers over list price indicate the demand for this particular house is high. If there are not any recently sold comparables to support it for financing purposes, it will come back to what the buyer's and seller can negotiate from here.
0 votes Thank Flag Link Wed Jan 30, 2013
My apologies, but I should have been clearer with my question: After reviewing the facts of this situation, what do you think is the contract price?
Flag Thu Jan 31, 2013
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