Home Buying in 95122>Question Details

Frog, Home Buyer in 95122

we paid for an appraise paid for the home inspection we put aclause in the contract that we would pay 5000 dollars if it didnt appraise for 160000

Asked by Frog, 95122 Tue May 11, 2010

it appraised at 160000 now the seller still wants us to pay the 5000 and he is refusing to sign for the second appraisel what can we do

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8
why would you ever pay $5000.00 more than the value??
0 votes Thank Flag Link Wed Feb 8, 2012
Frog,

We are all waiting to hear additional information from you so that we can understand the problem.
Please enlighten us.
0 votes Thank Flag Link Sat May 15, 2010
This has become a common solution to appraisals coming in low. As long as both buyer and seller agree to this, and the buyer's lender/financial advisor feels this is financially feasible for the buyer, then this can occasionally be a way to get your offer accepted, particularly in multiple offer situations. Your Realtor should have explained this to you as well. The seller is under no obligation to pay for the 2nd appraisal, and when push comes to shove, should the buyer really want the property, they will pay for the 2nd appraisal. Unfortunately, no party has control over what appraisers are used anymore, so there are no guarantees that the home will appraise for more.

Lisa Wiseman
(408) 591-7778
DRE #01505493
0 votes Thank Flag Link Tue May 11, 2010
As you probably have figured out by now that since none of us agents here on Trulia are a party to your contract only you, the seller (and perhaps an agent or two) know what is in the contract. So it is not clear to us what the contract stipulates. The exact "clause" language you used will determine what your contract states and it can be interpreted by a Real Estate attorney. Something seemingly as benign as "subject to" or "contingent upon" can be interpreted differently in legal terms.

Suggestions;
If you have agents involved then get their brokers to look at the contract.
Contact a real estate attorney.
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Tue May 11, 2010
Frog,

The paying above appraisal is something that is being seen more and more often among homes that are private investor owned (flipped) and that the same buyers have offered more than what it is listed for. The verbage usually reads something like this ( pay UPTO $5000.00 over appraised value NOT to EXCEED $160,000.00).

The only part I don't understand is why the seller would need to sign for a second appraisal. What do they have to do with it?

You need to speak to your agent and lender. Get your agents broker involved to sort this out.
0 votes Thank Flag Link Tue May 11, 2010
Frog -

There are so many questions that come to me regarding your question.

1.) Buyer's normally pay for an appraisal through their applied lender. If the seller is financing, it is unclear who wants the second appraisal. There are situations where the lender will request two appraisals. Sometimes with FHA at 3.5% down. Sometimes when the buyer owns more that 4 properties.

2.) I don't understand the 5K clause. If the seller paid for the inspections and appraisal, I might be able to see what there was a reimbursement if it didn't appraise.

3.) To know what you can do, you need to sit down with your real estate agent and review the contract. The only way to know your options is to have a complete understanding of the contract. If you don't have a real estate agent, a real estate attorney will be the next option.

To many guesses could cause more issues about what can be done to satisfy all with contract information given.

CJ
Web Reference: http://www.TalkToCJ.com
0 votes Thank Flag Link Tue May 11, 2010
Frog,
I agree with Sara, what do you need a second appraisel for? unless the bank wants to order one. This sounds strange to me. if you wrote that you would pay UP to $5000 to cover if it did not appraise for the full 160k, then there shouldn't be a problem, but if there is..... some data is missing as to what EXACTLY was written in the contract. Your Agent should be all over this,if not call his broker, if that doesn't work or aren't using a seperate agent or any agent ( not smart) then contact an attorney before you do anything else. This sounds very strange something is missing here, have someone (attorney) look over this contract as it should be crystal clear what the $5000 was suppose to cover and nothing else and not open to interpetation by the seller.
Regards,
Allyson
DRE# 01397256
0 votes Thank Flag Link Tue May 11, 2010
I'm not clear from a contract point of view. Who is to receive the $5K? Why was this clause put into the contract? Why is there a 2nd appraisal if the property appraised okay. I'm assuming that you are working with a realtor with this transaction. Your Realtor should be fighting for you . Your Realtor should be working to help you with the binding contract you signed with the sellers.

Good luck. You may want to hire a lawyer if you believe that you are in the right.

Sincerely,

Sara Greenwod
0 votes Thank Flag Link Tue May 11, 2010
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