kimanuel2, Home Buyer in Sacramento, CA

i made an offer on a house and i,m in contract/appraisal came in 40,000 below asking price.what can i do or what should i do. thank's

Asked by kimanuel2, Sacramento, CA Sat Feb 2, 2013

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Valarie Bead…, Agent, West Point, CA
Tue Apr 15, 2014
You can have your Realtor walk the property with the Appraiser and point out compensating factors that can adjust the appraisal - a newly installed 40 year roof, upgraded infrastructure such as electrical, HVAC, upgrades such as hardwood or tile flooring, upgraded light fixtures, appliances, landscaping, new paint, carpet - all compensating factors can have a positive effect as an appraiser compares the property to an REO or distressed property that might be considered a "comp" to the subject one.
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Anna Boyd, R…, Agent, El Dorado Hills, CA
Mon Apr 15, 2013
The rub in Valley Springs (in my most humble opinion as I do list and sell there) is the properties should be listed for more than they've been listed for and sell for more than they've been sold for. I see Valley Springs in a bubble that has not realized that home prices are actually increasing (or should be as they are in great commute distance to Lodi, Stockon, Jackson, San Andreas). Seems like some are just happy to list and sell at 2010 prices - much to the detriment of current sellers and give no new ammunition to appraisers looking for homes they can use for comps.
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Thomas Little, Agent, Tuolumne, CA
Wed Feb 6, 2013
Hi. I'm Thomas Little Broker/ Owner of Do Rite Realty in Tuolumne CA. I think the best answer to your question (unfortunately) is to ask you a question. What does your contract say that your remedies are if the appraisal does not meet sales price?? Hopefully you are working with a REALTOR who uses the most up to date and thorough contracts available: contracts and forms designed to help protect consumers through a real estate purchase or sales transaction. Best Wishes. Let me know if there is anything I can do to assist you.

Thomas Little
Do Rite Realty
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Brian Clinger, Agent, West Michigan, MI
Tue Feb 5, 2013
Matt provided some great options. In addition I would review the appraisal and comparable sales used to determine value. There are good appraisers and then....... If the home you are buying is in great condition and the owner lives in the home, you would want similar comps. If it is a foreclosure that has been abused again you would want to be sure that similar comps are being used. I have had some success in getting appraisals changed when I didn't agree with the comparable homes they used to determine value.
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Matthew Bart…, Agent, Glendora, CA
Tue Feb 5, 2013
Hi Kimanuel2,

You have several options. FIRST: You can seek to renegotiate the price with the Seller(s) down to the appraised value. The Seller(s) may refuse this option thinking they could cancel the escrow with you and find a new Buyer(s). Your Realtor will need to point out to the Listing Agent the potential disadvantages to the Seller(s) should they refuse to lower the price and go this route. The Seller(s) will need to know that any new prospective Buyer(s) using financing to purchase, will need to have an appraisal and the chances of the shortfall showing up again are likely. The Seller's also will have to disclose the earlier appraisal shortfall to future Buyer(s). This includes all cash Buyer(s). And should your financing be FHA, your appraisal will be attached to the home for up to 6 months. Meaning the shortfall will not be avoided.The Seller's will start all over for no reason and could end up losing more money in the process.

SECOND: If you really love the home you could speak with your Realtor and Lender about coming in with a bigger down payment to cover the $40k appraisal shortfall. You could also ask the Seller(s) to meet you halfway by lowering the sale price by $20k. leaving you to come in with an additional $20k down to cover the shortfall. The Lender will have to approve this. I must also say it is my professional opinion that you DO NOT come in with an additional down payment over and above appraised value of the home. That being said, the choice ultimately comes down to you.

Your THIRD and final option should the Seller(s) refuse to lower the sales price down to the appraised value is to walk away and cancel the escrow. Now should you choose to walk away you must still have your appraisal contingency in effect and be within your inspection period (typically 17 days after offer acceptance unless otherwise agreed to in writing) to cancel the escrow and be entitled to get your initial good faith deposit back.

I hope my answer helps you and allows for you to make the best decision for you and your family. Good luck!

Warmest Regards,

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