Our lender didn't order the appraisal in time.The appraisal deadline was extended but seller wouldn't sign request for the appraisal objection.

Asked by Llou25, Denver, CO Wed Mar 13, 2013

Do we have any recourse if Appraisal comes in lower than sales price?

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Bob Schenken…, Agent, Denver, CO
Wed Mar 13, 2013
Unfortunately these people who answer questions from out of state, don't know Colorado's contract and as such are not the best people to answer. The appraisal contingency is only valid until the date agreed upon. If the seller won't extend the deadline, you need to hope the appraisal comes in at value. If it does, no harm, no foul. If it doesn't come in at value, you have two choices: First would be to come up with difference in cash, and continue as planned. Or, second walk away and probably lose your earnest money deposit.

If this was truly an error on the part of your lender, I would ask them to pay you for any earnest money loss. Please feel free to contact me with any questions!

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2 votes
Unfortunately there are lenders who still aren't on top of it, even with prompting from the Real Estate Broker. It is so very important to have the right lender from the start, and there aren't as many as most folks think in my experience.
Flag Tue Jun 10, 2014
Robert McGui…, Agent, Denver, CO
Thu Mar 14, 2013
In most situations it is up to the Buyer's Agent to let the lender know that you are past the Inspection Resolution and ready for the appraisal. On the other hand, it is up to the lender to follow the dates in the contract. Especially the few dates that apply to finance. He should have called you and the agent before the deadline to see if he can go ahead and order it. the appraisal deadline was not extended if the seller didn't sign it. If you still want the home you may want to go ahead with the appraisal and hope that it comes in at value. The seller is not wise to take this adversarial position since you have other ways to get your earnest money back if things don't go through. the last one and most powerful one in the Colorado contract is the Loan Objection Deadline. If the loan is 'unsatisfactory' in any way in your own 'subjective opinion' you have an out all the way up to the closing date. It is paragraph 5.2 in the contract. I would request a rebate of your appraisal fee from the lender. Best of success with the appraisal and your purchase. These things usually work themselves out even when mistakes are made.

Robert McGuire ASR
Your Castle Real Estate
Direct - 303-669-1246
2 votes
Angie Dziurg…, Agent, Denver, CO
Wed Mar 13, 2013

Have you been told that the appraiser will not get the value in time to meet the objection deadline? It sounds like you are currently in compliance with all of your deadlines. If the value does not come in by tomorrow, then you can terminate the contract within the parameters of appraisal objection deadline and your earnest money will be returned. It doesn't make much sense to me that the seller would extend the appraisal deadline, but not the objection. Are there other factors involved?

Bottom line, if you are in compliance with your deadlines your earnest money is not at jeopardy and you
are not obligated to pay anything beyond appraisal value. Keep in mind, if you are financing with FHA or VA, the appraisal deadlines are not applicable anyway.

Sometimes those last few days of getting the deal done are extremely stressful. Good luck!
2 votes
Darrick Gill…, Agent, Englewood, CO
Tue Jun 10, 2014
The Seller does not have to sign the amend/extend. You will get your earnest money back should they decide not to sign the agreement.

A different lender would be a good choice, your realtor should have been on this as well.
0 votes
Vincent Chase, Home Owner, Coral Gables, FL
Wed Jun 4, 2014
This post is obviously late but for others in the same situation my advise would be to do your own market research. I'm not sure where to start in Colorado but in Washington, DC I talked to several realtors and a few appraisers before I made my first offer last year. This site has a ton of valuable information on specific neighborhoods which I found very helpful http://www.capitalmarketappraisal.com/

Maybe there is an equivalent in Denver or whichever city you live in? I also found some good info on Zillow for what its worth.


0 votes
kari.stoltzf…, , Boulder, CO
Wed Aug 28, 2013
In Colorado according the following paragraph found in the Colorado Contract to Buy and Sell Real Estate at the end of section 3 Dates and Deadlines listed under NOTES:
"If FHA or VA loan boxes are checked in 4.5.3 (Loan Limitations), the Appraisal Deadline does NOT apply to FHA insured or VA guaranteed Loans"

So basically if you are taking out an FHA or VA loan the appraisal Deadline, and therefore the appraisal objection deadline do not apply to the contract in any way.
0 votes
Russ Ravary, Agent, Commerce Township, MI
Wed Mar 13, 2013
Unfortunately i don't think there is anything you can do. If the appraisal doesn't come in and you don't have the money then you can't get the mortgage done. Hopefully you have an out of the contract that way
0 votes
Cory Fitzsim…, Agent, Golden, CO
Wed Mar 13, 2013
How do you know the lender did not order the appraisal in time? Did your agent give your lender the go ahead after inspection? The lender orders the appraisal from a pool of "approved" appraisers and then one of them has to agree to the order. The appraiser could be taking their sweet time. Appraisal are a mess and have been for some time. No one can contact the appraiser. No way to monitor or complain either and it is very frustrating for all involved. If you get the appraisal in before the objection you are in compliance and you have until the resolution deadline to sort it out. Talk with YOUR agent! Good luck!
0 votes
Then the question is why was it canceled? Usually if you are not through the inspection period you don't want to proceed with the appraisal since that is a charge you incur as the buyer. It is hard to say "who" is at fault but you might not have any issues if appraisal comes in ok. Again, talk with your agent as communication is key. Good luck and I hope it all works out for you.
Flag Thu Mar 14, 2013
Lender said agent had canceled appraisal order at one point. Agent said that she didn't. appraisal was ordered 3-7-13. Appraisal was done this a.m. but our appraisal objection deadline is tommorrow 3-14. Lender said that she probably wouldn't hear anything till next week.
Flag Wed Mar 13, 2013
Sally Grenier, Agent, Boulder, CO
Wed Mar 13, 2013
I'd be curious to know who your lender is. Sounds like they dropped the ball, but are trying to recover it. Sounds like you're still okay...as long as you get the appraisal back by tomorrow.

Sean, I sort of agree with you....but really it's not a "loan commitment" deadline. The contract is not between the seller and the lender. As you know, it used to be "Loan Conditions" deadline and now it's called "Loan Objection" deadline. But it's for the buyer to back out of the deal if they object to the terms of the loan. It's NOT a deadline for the lender to have loan approval by that time. If it doesn't appraise and you've missed the appraisal deadline, theoretically you MIGHT be able to argue that you don't agree to the terms of the loan. I'm just sayin...it's a little muddy and I wouldn't want to risk my client's earnest money and fall back on the loan objection deadline.
0 votes
Sean Dougher…, Agent, Fort Collins, CO
Wed Mar 13, 2013
to add just a little bit to what Bob just said, our company is legal counsel has told us that the loan commitment deadline to potentially be utilized in the circumstance. basically because the appraisal did not come in at value, and therefore your loan would not be acceptable to you with the current terms you now have to abide by, you might be able to make the argument that you can cancel out by the loan commitment deadline.

now first things first you should wait and see if the appraisal comes in low or not. if it doesn't do you have nothing to worry about.

if it does end up coming in love you should probably consultant attorney before you go based upon what I just told you, as I am NOT an attorney.

best of luck to you!
0 votes
Llou25, Home Buyer, Denver, CO
Wed Mar 13, 2013
We kept an eye on both the loan officer and buyer agent. We asked about the appraisal a week and a half ago. It was supposed to be done yesterday- is being done today- objection deadline is tommorrow.Will we have to come up with the difference in price if there is one or ill the deal just fall through?
0 votes
Mel Bernstein, Agent, Lake Mary, FL
Wed Mar 13, 2013
If your Real Estate Purchase contract is subject to financing, you may be eligible to drop out of the contract since you will not be able to finance the property at the approved amount.

This isn't a type of "recourse" per se, but rather a condition clause in the contract. The question is timing, and the eligibility for you to receive a refund of your deposit.

Hopefully, your agent included an appraisal addendum, which specifically outlines this potential issue.
0 votes
Scott Godzyk, Agent, Manchester, NH
Wed Mar 13, 2013
Not really, if you have a mortgage contingincy and are still within the dates, if the mortgage gets denied becuase it does not appraise, then you may be covered. Keeping an eye on dates is the loan officers job, keeping an eye on the loan officerk is the buyer agents job but keeping an eye on your best interest and overseeing dates such as this is the buyers job as they are the one who pays in the end.
0 votes
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