Home Buying in Los Angeles>Question Details

Meshylle Anne…, Home Buyer in Glendale, CA

i payed for the inspection and appraisal, then we cancel? I've just lost a lot of $$$$..

Asked by Meshylle Anne Martin, Glendale, CA Thu May 10, 2012

we can't do anything after appraisal came low and the seller doesn't want to lower the price?

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Answers

13
You can have your lender dispute the appraisal. Often times you may need to pay for a second appraisal to validate the asking price. The current market has been picking up its pace. Many sellers are willing to take the chance that the next buyer will have more money down/pay cash. Hopefully you can find a reslution.
I would 1. Dispute the appraisal if you feel the property is indeed worth the value. 2. Have your agent present several recent closed comps (to the listing agent) to validate the appraisal and try to re-negotiate. I hope things work out in the end!
Stephanie Hart
Forecast Realty, Inc.
CA DRE# 01338444
310-918-6856
http://www.hartssellsouthbay.com
0 votes Thank Flag Link Sat May 12, 2012
There's not much you can do, except try to switch lenders and get a new appraisal. How comfortable do you feel with the value of the property?

Richard Schulman
Keller Williams Realty
(310) 482-0173
Schulmanrd@gmail.com
http://www.richardschulman.com
0 votes Thank Flag Link Fri May 11, 2012
Have your agent talk to the seller and let them know that they will have to put the property back on the market and take the same risk all over again with a new buyer who will likely get a similar appraisal. It's worth it for them to negotiate with you.
0 votes Thank Flag Link Fri May 11, 2012
There are a coupld of things I might try before cancelling.

1) Have your Realtor try to negotiate a sale with the seller based on the appraisal price or some compromise thereof.

2) Have your agent review the appraisal, check for mistakes and perhaps ask for another appraisal from the lender.

if these don't work, you cancel. And alhtough it pretty much sucks, you can take comfort in knowing that you didn't over-pay for a home.
0 votes Thank Flag Link Fri May 11, 2012
This does happen and it is unfortunate but if the appraisal is accurate you saved alot money more than you lost. If you don't think the appraisal is correct you can request an appraisal review.
0 votes Thank Flag Link Fri May 11, 2012
Low appraisals are the bane of our industry right now. This is typical in a market that has hit bottom and is slowly recovering, especially when much of the market is distressed properties which pull down market values. Recent legislation has made appraisers extremely conservative on their appraisals.

You now need to make a decision how badly you want the house, and how good the deal was that you struck on the house. If you think you are getting a good deal you may want to invest for a second appraisal, but beware this may not work on certain loans such as FHA where the first appraisal would have to be disputed, not just replaced. A good agent will work with the appraisal management company if there is a real flaw in what the appraiser did. But that is a crap shoot and many of these companies don't care about reason, they get paid either way.

The money you have invested so far is money well spent. If you were truly overpaying, you would have paid many times more extra over what you have now spent to find out if it was a good deal. If you still want the house there are several avenues a creative agent can take.

And don't blame the seller. They have their agenda just like you. And a lower price may not work with their needs of buying another home, or getting out of a bad mortgage whole, or a host of other reasons. Or they may just feel their home is worth the agreed upon price. That is their perogative.

Best of luck, and even though this is negotiating for your home, at this stage it is a business process that sometimes you have to kiss a few frogs to find your prince, and it may cost you some money.
0 votes Thank Flag Link Fri May 11, 2012
If you really like the property you still can purchase , just need more down payment.
Good luck
Ellie Salemnia
Keller Williams B/H
Elahehsal@yahoo.com
0 votes Thank Flag Link Fri May 11, 2012
Hi Moimoi:

Bummer to hear. Unfortunately, that's the way the cookie sometime crumbles. Has your agent gone back to the appraiser and asked them to re-evaluate the comparable sales? Has your agent looked at the comparable sales to determine if the sale price is justified? Then, you can have your agent present the comparable sales to the Seller to hopefully have them lower the price. You can also speak with your lender and contest the appraisal...but your agent will need to provide comps.

I always look at comparable sales and show them to my client before we write an offer to make sure that our offer is within the ball park.

Were there many items that need repair in the inspection report? You do an inspection to determine the condition of the house property so you know what your getting into. Sometimes, people pay for inspections, find out the property needs more work than you expected, then they cancel the escrow based upon findings.

Your other option is to increase your down payment to meet the price...cover the amount between the appraisal and the sale price in cash. However, it sounds like the property is overpriced and this option may not be your best bet.

Good luck!

All the best,

Kat Becker, Realtor
Prudential California Realty
katbecker@prula.com
0 votes Thank Flag Link Fri May 11, 2012
Excellent advice. Moimoi, get back with your Realtor and ask them to follow up, if they haven't already. Today we often are in positions to challenge appraisals, the market is very colatile and yes, prices are going up, so a really low appraisal should be questioned. The value of a property is "what the buyer is willing to pay"
Flag Fri May 11, 2012
That is a function of rising prices. Comps may be from months ago. If you like the house enough try another lender. You will have to pay for a second appraisal.
0 votes Thank Flag Link Fri May 11, 2012
I hope your Realtor ran the comps for you before you put in your offer. If you think the appraisal came in under value you can challenge the report with new comparables. Often some lenders repeatedly come in too low. I would explore that option.
Your Realtor should have explained the seller never has to come down in price. They agree to what's on the contract, nothing more, nothing less. If I ever think there might me a problem with value I have my clients wait to do a inspection until the appraisal comes in.
0 votes Thank Flag Link Fri May 11, 2012
You would have lost a lot more money if you didn't pay for the inspection and the appraisal.
0 votes Thank Flag Link Fri May 11, 2012
Unfortunately that happens from time to time. If you would like to keep looking and do not have an agent already I would be happy to cover your next appraisal and inspections if we get into an escrow.
0 votes Thank Flag Link Thu May 10, 2012
Unfortunately that is simply part of the process.
0 votes Thank Flag Link Thu May 10, 2012
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