House Values Going Down

Asked by Ronnie, Philadelphia, PA Fri Sep 19, 2008

I have made an offer on a home, and had it accepted. But I checked online, and the value of the home is at less than the accepted offer. Does this mean that the seller is required to lower the price of the home? What are my options as the buyer? In the Agreement of Sale, it says that if I can't get a loan, then it's null and void. Please Help!

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Fred Glick, Agent, Mountain View, CA
Fri Sep 19, 2008
Dear Ronnie,

When you apply for your mortgage, they will do an appraisal. An appraiser is the one that can establish a value.

If the value comes in less than the sale price, the mortgage company can reject you and you can either get out of the deal and get your money back, go through with it an put more down payment, or renegotiate the price with the Seller.

This is assuming you signed an agreement that lets you do that.

It is very hard for me to be sure that this advice is perfect for your situation because I do not know what you signed and all those giving advice should realize that. So, either contact one of us, your agent or a real estate attorney.

Good luck!
Web Reference:  http://fredglick.com
1 vote
Chris & Step…, Agent, Philadelphia, PA
Sat Sep 20, 2008
Ronnie,

Fred has it right. Not sure what you checked online... zillow ? valueahouse.com (just made that up) ? The value will be determined by an independent bank appraisal that will be ordered from your loan officer.

I would also check with your realtor to go over "this value" as well.

As Fred indicated, if your realtor elected a mortgage contingency than you will be protected by the language that is in that section of the agreement of sale. First, I would look more into this value issue and wait for your appraisal to be completed as there are lot of inaccuracies out there ?

Good luck and for more helpful hints, visit our site below !
Web Reference:  http://www.thesomersteam.com
0 votes
Ronnie, Home Buyer, Philadelphia, PA
Fri Sep 19, 2008
Thanks for the answers all! I do have a buyer's agent who worked with me on the purchase. While, I feel she's not THE BEST realtor, she did give me some comparables at the time we were looking at the home before I put in the offer. At the time, I was getting the house at $5000 less than what others like it were selling for. But now that I'm looking, it's showing less than that.

I don't know how much weight to put behind the internet value I saw, since it is a website like zillow. I guess I'll just have to wait for the appraisal. Thanks!
0 votes
Scott Godzyk, Agent, Manchester, NH
Fri Sep 19, 2008
If the offer as been accepted and signed by all parties, your lender will require an appraisal. If the appraisal comes in less than the sales price, you will have to go back to the seller to reduce the price, pay cash for the difference if teh seller wont or cant or get out of this contract and find another house. You really need to do your research before you make an offer. Your buyers agent should have provided this to you. if you didnt use one you should have, every buyer needs someone to look out for them and guide them through the buying process. In most cases a buyer agent doesnt cost you anything oout of pocket, as you can negotiate that they get their pay from the commission offered through mls to a buyer agent. good luck with your purchase.
Web Reference:  http://www.ScottSellsNH.com
0 votes
Horlow , , 19440
Fri Sep 19, 2008
Ronnie,
I agree with Pete, your lender requires an appraisal for this reason. Also talk to your agent, i my self always look at recent sales and show my buyers a CMA before making an offer. Again talk to your agent. Good luck!.
0 votes
Pete Simonet…, Agent, Wayne, PA
Fri Sep 19, 2008
Ronnie,

I'm not sure where you checked online, but the values on sites like Zillow do not reflect the actual value. Your mortgage lender will require an appraisal of the property you are buying. This is the information that will determine the value of the property or, more accurately, what the bank will lend on. Touch base with your mortgage company. The seller is not required to lower the price based on an appraisal, but there might be room to negotiate in order to keep the deal together. Consult with your agent.
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