Home Selling in 27278>Question Details

Kim, Home Seller in 27278

We recently listed our 1998 manufactured house which is on our own land (less than an acre) at 89,500 and within a month we received an offer.

Asked by Kim, 27278 Fri Jul 20, 2012

We had the purchase contract of 89,500 and we would pay 3,500 of the closing costs. Looked good, until the appraiser came in. Had a hard time finding comps but did and valued ours at 75,000 :(
We agreed we could lower it to that price but they must come up w their closing costs. Our dual agent already lowered her commission to 4. something so didn't offer to lower it more. The buyers don't have the money for any closing costs so the deal feel through.
Should we have just offered it at 75k and pay their closing? We would have only net 1,500 with this scenario but at least we still owe less than what it is worth. We put on a new roof and new floors, When we bought it in 2005 it was appraised at 80k. Will the value keep declining? Should we find those buyers and offer it to them? Kids and I are moving in Aug and I don't want husband to be stuck in this house waiting for buyers, then we would need to pay for 2 places......Not sure if it is worth renting out, for $200 above mortgage....SOS

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Thanks for all the advice, it is really appreciated.
We have from those "buyers" from their credit union pre -qualification of 90k under 30 yr ARM. They left $500 earnest & $100 due diligence. Now they have to pay the appraiser & inspectors.
Will def have look into other selling/leasing options....
0 votes Thank Flag Link Fri Jul 20, 2012
Agree with previous poster. There seem to be a lot of people looking for lease-options right now. Owner financing is also an option, and if you structure it well, you can always sell the paper on the secondary market and end up getting your money that way.
0 votes Thank Flag Link Fri Jul 20, 2012
There are over 20 ways to sell a home. When the home is in an environment where the appraisal will be PREDICTABLY low,(and that was your situation) the strategy to use requires a better selection process for the buyer. If the buyer has no resources, they don't have two nickles to rub together, that means the seller pays for EVERYTHING and everyone will have their hands in the sellers pocket. Not a good deal for the seller.

It is time to regroup with your agent and discuss the other home selling strategies. Don't overlook Don Tepper's suggestion. This may be your opportunity to earn incredible income (YMMV) from an asset that appears will only break even in the best of situations.

With the knowledge you now have (failed FHA purchase) now is a good time to assess the tangible and intangible assets of this property and develop a accurate profile of the ideal buyer who will value those attributes. Promote your home, using the proper titles, in venues where those candidates get there information. (i.e. Criagslist) Do not engage in negations with unqualified buyers. No down payment, no earnest money, ....refer to failed FHA above.

Best of success in selling,
Annette Lawrence

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0 votes Thank Flag Link Fri Jul 20, 2012
Thank you for your replies. I really appreciate the advice. Didn't realize it was doomed from start as they left $500 earnest, $100 due diligence. They were pre-qualified for 90k for 30 yrs under ARM program according to note I have from their credit union lender. Now they have to probably pay the appraiser & inspections that were done. So ironic they could buy it for 86k but not 75k, will look more into owner financing, evening though we aren't the owner, the bank is
Flag Fri Jul 20, 2012
Hindsight is 20-20. Maybe you should have gone with their offer, but it could have fallen through anyway. The buyers were just scraping by; they were borderline to begin with. And if they weren't able to handle $75,000 and closing costs--the final deal--they certainly wouldn't have been able to handle what they originally offered: $89,500 (or really $86,000 when you factor in closing costs.) So, for the buyers the price came down about $10,000 from THEIR offer and they couldn't afford it. I think that deal was doomed from the beginning.

One tip: Consider offering owner financing. Lots of potential buyers in that price range have financial issues and will have a hard time buying conventionally. That puts some risk on you of they default, but then you get the property back. But the advantage is that you then can structure the deal whichever way you and the buyers want. Or offer it as a lease-purchase or on a land contract. They're slightly different methods, but both offer more benefits to you than simply renting the place out. Check with your Realtor for more guidance.

Regarding its valuation, understand that nothing is precise, especially when comps are difficult to find. It may only be worth $75,000. It might be worth $89,000. Really, though, it's worth whatever you and a buyer agree on.

Hope that helps.
0 votes Thank Flag Link Fri Jul 20, 2012
Don Tepper, Real Estate Pro in Burke, VA
Hind sight is a wonderful thing! That said, I would first pay for a second appraisal - not a free CMA - don't offer any information to the second appraiser as to what it appraised for recently. Make sure the appraiser you select is from the area - area appraisers know the market - After obtaining the second appraisal - you can determine if you need to go back to the original offer - or if you need to continue to find a new buyer. Some appraisers are highly conservative - others are not even from the area - the buyer's lender selects the appraiser. I would definitely not sell yourself short. Get the facts before you make a decision. The buyer's lender appraiser is NOT always right!
Hope this helps!
0 votes Thank Flag Link Fri Jul 20, 2012
Renting is an option, but being a long distance landlord is always challenging.

No one has a crystal ball, but in retrospect it sounds as if you should have made the deal and p;aid their closing costs. If you end up carrying the house for another 6-9 months before selling it it's unlikely you'll fare any better, though it possible another appriaser may come in a bit higher.
0 votes Thank Flag Link Fri Jul 20, 2012
sorry, meant it is built in 1994
0 votes Thank Flag Link Fri Jul 20, 2012
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