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Assistant Director of Sales
ACADEMY MORTGAGE CORP
105 Conklin Street
Farmingdale, NY 11735
(516) 606-9648 Cell
(631) 227-3258 Office
(516) 584-7138 Fax
Why on earth would you pay a builder/seller/agent more than a home is worth????
Have people not learned lessons from the past 6 years? IT IS overpaying for property that has, and did cause the housing collapse. Obviously, builders/sellers/agent don't care. They've cashed the checks and moved on to the next project, vacation, or un-knowledgeable buyer.
The banks don't care they have a sealed deal with you by the trousers, they have insurance, they have a write off, they have the next person buying it in a foreclosure. I guarantee you the foreclosed amount is very close to fair market value.
Buyers BEWARE!!!! Do yourselves a smart and life favor go with the appraised value, or move on to the next home. I've appraised plenty foreclosures over the past years. I'm asking myself will your overpriced home be my next assignment?
I am an appraiser, homeowner, wife, mother. I treat people with honesty and the way I want to be treated.
You can appeal the appraisal. (Talk to your lender about this process)
You can get see if your bank to see if you can have another appraisal.
The seller decreases the price (which is your best option)
You can pay the difference if you the seller does not want to reduce the price
Best of luck to you...
Henry F. Brooks II
Realtor, Branch Manager
BMC Real Estate
101B W. Main St. Ripon, CA 95366
You have several options: if you really want the house and have the funds you can make up the difference; you can split the difference with the Seller; you can ask the Seller to adjust the price down to the appraised value; or you can terminate the deal.
In this market, Sellers will be more eager to negotiate a new price given an appraisal that doesnâ€™t support their asking price. However, there are some Sellers who will want to try again, because sometimes appraisers donâ€™t know the area and their valuation isn't always right.
Best of luck!
Prudential Fox & Roach
Licensed Associate Broker
Accredited Buyer Representative
William Raveis Legends Realty Group
Home value and appraisals are driven by local real estate market activity and arrived at through the use of recently sold comparable property. The bank has no control over this.
One would only hope that when a property doesn't appraise for the contract amount that truly motivated sellers and buyers would be able to find an avenue that would resolve the difference, keeping all parties happy. With this said, there are no assurances that a seller would be willing to make up the difference to make things work out.....
Hope this is helpful.
The banks have no control over the appraisal. The appraisal is supposed to be done by an unbiased 3rd party and it is done to protect you and the bank to ensure you don't pay more for the home than it is worth.
You have a couple of options:
You can appeal the appraisal. Review the comparable properties (sold properties) used by the appraiser and then check to see if there are any other comparable properties out there that sold for a higher price. If the appraiser agrees they may adjust the price. I have never seen this work.
You can get check with your bank to see if you can have another appraisal done. If they agree, you will risk the price of another appraisal. It may come out better or could possibly come out worse. If the bank won't agree to another appraisal you can switch your mortgage to another bank and get a new appraisal.
If you are doing an FHA mortgage another appraisal or switching companies is not even an option. With an FHA mortgage, the appraisal is attached to the property for a few months.
If nothing can be done to modify the appraisal you have 4 options:
1) The seller decreases the price by 8%.
2) If you have the funds, you pay the 8% difference.
3) You meet in the middle (or somewhere in between). i.e. The seller drops the price 4% and you kick in 4%.
4) The deal falls apart.
In this market, most buyer do not want to pay more for a home than the appraised value but if you really want the home that may be the only option if the seller won't work with you. Of course, if the deal falls apart is the seller going to relist at the same price when they know it didn't appraise. Some sellers will dig in their heels and try it.
I hope this is of some help.
Prudential Patt White Real Estate
Lehigh Valley, PA
Your question is critically important and vitally important to understand.
Be aware, the bank does hire a 3rd party to complete the appraisal, but the bank also imposes the conditions regarding the homes that can be included or excluded as comparables. For example, if no comps exist the bank can compel the appraiser to use a monthly adjustment (something like -1.5% monthly) for each month since the last comparable sale. Others will allow the inclusion of short sales. A forced low appraised value is a hidden asset protection plan for the lender.
Naively believing differently will not compel those representing you from preventing this situation(low appraisal) from occurring. Unless of course, you are the buyer. Sometimes, knowing how the process works, you can KNOW the appraisal will come in low. In such situations I will compel the buyer to waive the appraisal contingency. Then means the buyer must have the means to come to the closing table with a pile of cash to pay the difference. The alternative is the seller lowers their price. My action will depend on who I am representing.
In nearly all situation, a lower than offered price appraisal starts the renegotiation process.
It sounds like you are the buyer. If this is an FHA backed loan, you are in a SIGNIFICANT and superior position. Expect to buy at the appraised value.
Best of success in acquiring your new home.