ok so we got our house and made the offer to buy and it was accepted so the closing date on the house was sappose to be today right,but since the house did not appraise for what it was sappose to appraise for(85,500 only appraised for 81,000) so now what would be next,will we the buyers have to come up with the difference or will the seller have to come up with the difference?
2007-10-30 06:15:35 · 4 answers · asked by Corey D 1 in Business & Finance ➔ Renting & Real Estate
Are you putting money down? If you are, you (as the buyer) can pay the difference, however I would not suggest purchasing a home over the appraised value in this market.
If you are getting 100% financing, you will definitely need to re-negotiate the purchase price as the home is clearly not worth what the original purchase price was and your lender will likely not finance more than 100% of the home's true value - this is why lenders do appraisals.
So, in essence, you should definitely re-negotiate the purchase price as you do not want to pay more than the fair market value of the home and your lender will likely not finance more than that either. But, you will save yourself some money if you have a lower purchase price, so you could see this as a good thing.
If you have other questions, feel free to contact me directly.
2007-10-30 07:06:49 · answer #1 · answered by Quicken Loans 5 · 0⤊ 1⤋
The lender will base the amount of the loan on the lesser of the purchase price and appraised value. In this case, it's the appraised value.
Your options are to renegotiate the purchase price with the seller, and paying the difference yourself. I'll echo the remark that I wouldn't pay more for the house than the appraised value. Do you have a real estate agent? That person should be helping you with this.
One other option is to protest the appraisal. In general, a lender will accept 3 to 5 other comparable sales that you provide (you get them from a local real estate agent; they do this for free -- if you're asked to pay call somebody else) and forward them to the appraiser who may change his opinion. This isn't common, but I have seen it happen.
In the case of a refinance I would do this, but in the case of a purchase I'd try to get a lower purchase price.
2007-10-30 07:32:54 · answer #2 · answered by Debdeb 7 · 0⤊ 0⤋
The sellers will have to lower the price or you will have to come up with the difference, most of the time the seller lowers the price. The appraisal is to protect the lender from over lending on the prop. I sure would not pay $85,500 for a house that is worth $81,000, so tell them they have to lower the price or you walk.
2007-10-30 06:37:18 · answer #3 · answered by Leo F 5 · 0⤊ 0⤋
The lender will give you a loan based upon the LOWER of the purchase price or appraised value. Sounds like your home is overpriced. Put it this way, if a can of Coke costs $1, would you pay $3 for it?
The Seller has to lower the price. They are asking too much. If they don't I wouldn't buy the home as you are paying too much for it.
2007-10-30 06:21:23 · answer #4 · answered by thinking-guru 4 · 4⤊ 0⤋