Home Buying in Queens>Question Details

Noob, Home Buyer in Queens, NY

Hi all. I'm looking to buy a co-op in Queens and have a few questions.

Asked by Noob, Queens, NY Sun Jul 20, 2008

When an appraisal comes in below the contract price, do I, the buyer, have the option of renegotiating the price with the seller or am I left to come up with the difference on my own? If the latter, how do I avoid this problem? Should I have gotten the property appraised before putting in an offer? The process seems a bit backward to me.

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6
1)Let's hope your lawyer put in the standard boilerplate about mortgage committment at the appraised price or higher, or you are hosed. If he did, backing out is not a problem.

2)You can either renegotiate with the seller, or come up with more. Obviously, you will want to renegotiate with the seller to lower the price down to the appraisal. But one other option not mentioned yet is that if you know that very recent comps have sold for what you agreed to, you can read the appraisal and see if they used them. If they didn't, you can possibly get them to include them, but the chance is higher if they haven't sent out the final report yet. If they did, kiss that bank goodbye, get another appraisal and point out the comps beforehand - and perhaps get a discount since you did their work for them- then line up another bank, since gauranteed the fist one won't budge in this climate.

But only do all this if the seller is reluctant to budge and you really really really want this place.

If it were me, I would walk, but it might be your dream home.
0 votes Thank Flag Link Sun Aug 10, 2008
Hi, I'm interested in using a grant to buy a co-op too! I too was wondering if this would cause a problem when time to purchase a co-op. How did you find out about the grant and what program did you use? How did you coordinate the use of the grant with your lender?
0 votes Thank Flag Link Sun Aug 10, 2008
Thank you so much for your responses! I'll be sure to discuss this with my lawyer when the time comes. I'm leaning toward the option of paying for at most the appraised amount. Thanks again.
0 votes Thank Flag Link Mon Jul 21, 2008
The way around this issue is to include in your offer a stipulation that the purchase is subject to an appraisal that is the same as or higher than the purchase price. If the seller won't come down, you get your earnest money back. Have your lawyer insert such a clause, subject to their LEGAL opinion, which mine is NOT. The process isn't backwards; the way that it's often handled (no coverage for the buyer) is backwards.
Web Reference: http://optionsrealty.com
0 votes Thank Flag Link Mon Jul 21, 2008
If the appraisal comes in too low, you will be denied your loan commitment and will no longer have to be in contract to purchase the property.

You have several choices at this point: Put down more cash and lower your mortgage amount; tell the seller you will only purchase at the appraisal price; ask the seller to split the difference with you and put down a little more money.

Banks hire their own appraisers and that is whose numbers they use.

The property you purchase, although a long term investment, is going to be your home. The value of the home for your purchase purposes should be equal to how much you want to live there.
Web Reference: http://GailGladstone.com
0 votes Thank Flag Link Sun Jul 20, 2008
Mike, do you have an agent? I hope so. Your contract will tell you the "what-ifs" as it relates to the appraisal, and if you aren't sure where to look, your agent should be able to point it out to you. The appraisal is mostly for the lender, so, no, the process is not backward. However, you COULD have paid for an appraisal prior to writing an offer - but what good would that do you? It won't mean the seller will agree to your price, and the lender will still do another one. It could be helpful in negotiating a deal, but other than that, has no value. But, I see your point.
0 votes Thank Flag Link Sun Jul 20, 2008
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