Selling a house?

Question

Say that you have your house on the market at 50,000. Then someone is really interested, they have the money, and everything is in the works. The lending institution orders an appraisal and the house appraises for 10,000 more than the asking price. Can the seller raise the asking price after all that has been done??

Answer 1

Nope - once you have signed the purchase agreement, you entered into a legally binding contract that requires you to sell the home at the agreed upon price. The only time you could change the price is if the home appraises for less than the agreed upon selling price. Then the buyer has the right to back out unless you lower the price accordingly.

Answer 2

One of the previous answers had it almost correct. You have a legal contract you are required to adhere to. Simply because you've changed your mind as to how good that deal is, is no reason to alter that contract.

For that matter, neither is the house appraising too low a reason, BY ITSELF, for the buyer to back out. However, very few real estate purchase contracts do not have a loan contingency. If they cannot obtain financing, they have an out, and if they suddenly have to come up with $10,000 more of a down payment than they thought, well, lots of people don't have it, and if the lender won't lend according to the terms in the purchase contract, they have an out. You can let them go, or you can decide to drop the price to something that will fly.

Answer 3

You should have had the house appraised first before puting it on the market..you could go with the appraisal price but im sure the persons interested wont be to happy with trying to come up with the extra 10,000 you may lose their interest depending on how badly they want the house.

Answer 4

Not if a contract has been signed and sealed.

It only works in one direction.
If the appraisal is less than the price agreed to in the contract, the buyer can void the deal. This is always/usually stipulated in a real estate contract.

Only if the buyer is crazed to buy the property, he/she can up the down payment to cover the shortage in appraisal.

Answer 5

Not sure if this would help. Usually, a housing market correction last for years. It is unlikely things will brighten up in a few months, afterall, this bubble took 5 years for form.

It might be better to give some discount so you unload the house quickly and can use the gain of the home to make money elsewhere quickly. At the same time, you will save money by not paying mortgage for the next 5 months.

For example, if mortgage is $2500/mo. and you have $300,000 gain sitting in the house, by selling it now rather than 5 months later will save you $12500. It will also earn you as much as $7000 from interests (Assuming CD are paying 5.5% or higher).

Total financial benefit for selling early would be $20,000. I would give buyer some discount just because of that.

Finally, keeping a house in selling condition is a lot of work. If your realtor does staging, it costs extra to rent furnitures. If you are living in the unit, it takes extra effort to keep it clean. So, sell it fast!


http://money.cnn.com/2006/09/08/real_estate/caught_in_the_bubble/index.htm?postversion=2006090814
http://money.cnn.com/2006/09/05/real_estate/Ofheo_home_prices/index.htm?postversion=2006090514

Answer 6

I am a realtor....was the appraisal for a FHA or VA loan? The appraisal is only really important so that the bank understands that if you do not make your payments on the loan and you forcluse..they can get their money back from the deal...also, they have a PMI which is if you dont make a down payment of more then 20 percent of the closing cost (the loan) then that is to cover them becuase they have found houses that forclose usually end up selling for only 80 percent what they closed at.....but as far as appraisals and what the property is sadi to be worth on the county tax files...A HOUSE IS LIKE ANYTHING ELSE....it is only worth what you ARE WILLING to spend on it...if you feel the house is worth that extra or if some one else does...the will buy it for that price...I have seen houses sell for less then they are appraised for.....real este has become a funny thing now adays too....even if you signed all the contracts and promised to do what you are going to do (in this case they said they will sell the house) LAYWERS can get any one out of a contract nowadays...really! beleive me..as a realtor I have had that happen ed me TWICE recently........so...yes they can break their contract..relist the house and sell for more...but....WILL some one WANT to buy it for more? depends on location and convience......I am noticing some people are saying NOT IF SIGNED ON A CONTRACT AND SEALED BY LAWYER.....real life expreince...A lawyer can back you out...I have seen it twice already....one person made a good point on here to though....if you have a realtor working with you ask him to make a CMA (comparative market anlysis) to see what houses in your nieghbor are selling for......good luck...also...keep in mind....I dont recomd doing what you are going to do.....I do beleive that we should go back to the days off GOOD AS A HANDSHAKE...i beleive in that firmly

Answer 7

Depends on where you are and the laws in your area. In my home state, ALL real estate transactions must be in writing to be valid. If there is a written agreement for a set price, then the seller is obligated to that price regardless of the appraisal. If he chooses not to honor that price, you could sue for specific performance.

Answer 8

Once the deal is in Escrow, it takes both parties to change the sells contract.
If there are option clauses, there are outs.
There could be penalites in some clauses.
Besides that, even if it appraises higher, get on Zillow.com, or whater MLS (multiple listing service) and find out what other houses JUST LIKE YOURS have sold for recently.
You might find that his offer is the best you could get right now, ...or maybe not.
Disclaimer: I cannot tell you what to do as advice, you must make your own choice.

Answer 9

You could ,but risk not being able to sell it, and the appaisal being $10,000 higher secures the lending(mortgage)companies interest in the proprty, otherwise, if you raise the price, then the next buyers (if you get one) might not have such a secure loan, because the house will be only worth what it was bought for, and most banks do not want to invest in that.
Not to mention, it would be a scum-bag thing to do, and what goes around comes around.

Answer 10

you agreed on 50k . I don't see how you can ask more when its already in the works. You might could stop the process but there will be hard feelings and you will have to find a new buyer.