I am having a house built, and it almost finished the house just appraised for less than what home building company is asking for? I haven't had a chance to talk to my sales rep. I don't know what to do? I also don't know what they are going to do. THe bank will not lend me more than what the house is worth. What do you think is going to happen a far as the seller, and what should I do?
2006-08-03 16:47:09 · 8 answers · asked by Torrey O 1 in Business & Finance ➔ Renting & Real Estate
Some things to consider:
- I'm not sure about your area, but many new home subdivisions write contracts prior to construction and close escrow upon completion...which can take around 6 months. The residential market has been softening nationwide....have home prices for new home product declined since the time you signed your contract? If so, then the market value at the time of contract is going to be higher than the market value today. A good indication is the base price of your floorplan...is the homebuilder asking less for your specific plan than at the time you signed contract?
- See if you can get a copy of the appraisal to see what comps the appraiser used. If you're purchasing a home from a new subdivision, the best comps are going to be sales of other homes of the same floorplan in the same subdivision. There are some appraisers out there who are just lazy and only conduct an MLS (Metrolist Service) search for comps and miss out on some really good comps. See if you can chat with your sales agent to see if you can take a peak at recently closed comps in your subdivision to get an idea of what prices are in your subdivision (bear in mind that pricing for newly closed homes may be 6 months old due to the construction period...if pricing is declining in your area, a better indication may be newly signed contracts). Since the market is slowing, a good appraiser would consider comps in your subdivision (taking into account any changes in market conditions between the time of contract and the time of sale) as well as resales of existing homes of similar age, condition and quality. If the comps are crummy, you can probably get the appraiser to reconsider their valuation.
- Is there any way you can get a second appraisal done? The market value within an appraisal are the opinion of only one appraiser. Appraisers are kinda like doctors...you can always get a second opinion (they just deal in matters that can affect your financial help, not physical health!).
- If everything is solid in the appraisal, then you need to start chatting with your homebuilder. Is there anything in the contract that allows for re-negotiation of the sales price in the event of market decline?
- If there's nothing that the seller can do to accomodate you on their end, you'll need to chat with your lender to see what lending options are available for your situation. There's a chance that you may need to put more down to make the deal go through or to pull out of the sale.
Good luck!
2006-08-04 04:58:59 · answer #1 · answered by ? 3 · 0⤊ 0⤋
Try a seller credit to you at closing. Ask the seller to carry the note for the 2nd, make sure you didnt add upgrades that are being left off the appraisal & refuse to go through with the sale.
2006-08-04 02:40:26 · answer #2 · answered by Jacque w 3 · 0⤊ 0⤋
what does your contract with the seller say?
that is the document that should spell out your options and potential penalties
if the contract is unclear, you may need to have a lawyer look at it
if you have no contract with the seller, then it does not seem wise to pay much more for a house than it appraises for, regardless of the loan situation, so... with no contract to require otherwise, don't buy it at a price higher than the appraisal
2006-08-03 23:53:49 · answer #3 · answered by enginerd 6 · 0⤊ 0⤋
3 things can happen when the appraisal is lower than the asking price
1 the seller can lower the price
2.the buyer can come up with more cash
3. buyer and sell quit. the deal dies.
If the seller is smart he will lower the price because the next buyers will have the same thing happen it wont appraise.
we are in a declining market . atleast for the time being.
good luck
2006-08-03 23:56:16 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Read you purchase contract and see if it says Properety Must Appraise At Full Purchase Price.
Good Luck:)
2006-08-03 23:54:43 · answer #5 · answered by Brett H 2 · 0⤊ 0⤋
I would never pay more for a house than its worth and unless you have money to burn you shouldn't either. Offer him what the bank will give you. (Probably whatever it's appraised for)
2006-08-03 23:51:54 · answer #6 · answered by sudbury girl 3 · 0⤊ 0⤋
thats why they have down-payments OK 1st have another appraisal they do vary 2 the bank is not going to loan you 100%
HOW DID YOU GET APPROVED ? I think the scary thing here is sales rep ! what EXACTLY is the deal ? ( e-mail ) ( use my name @yahoo or link)
2006-08-03 23:49:17 · answer #7 · answered by Anonymous · 0⤊ 0⤋
You need an attorney if you have put any serious money at risk.
2006-08-03 23:51:23 · answer #8 · answered by thebushman 4 · 0⤊ 0⤋