My husband and I just recently signed a contract for a brand new house. It's all new construction and was on the market for 134,900.00. The builder decided to lower the price before we signed the contract, and dropped it to 129,900.00. So we went ahead with the deal and decided to buy it. We qualified for no money down, locked at 6.8 percent interest rate, and we asked the realtor if we could go ahead and get the loan for 134,900 to use that difference in price to pay off some of our debt, which come to a 5000.00 difference. She said that it would be fine. We were sch. to close on Monday the 3rd. Well, we found out yesterday that the appraisal came back and the house isnt priced right @ 129,000. It's actually cheaper. So now they have told us that they are not sure when we will close, until they can get in touch with the builder & negotiate. My question is, can he refuse to neg. the price and keep it where it is, and what does that mean for us? Thanks y'all!
2007-12-01 12:26:24 · 3 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
I hate to be the one to tell you this, but your agent is giving you bad information. Lenders ALWAYS lend on the lesser of the appraised value or contract sales price. Therefore, if you are getting 100% financing and the appraised value comes in at $129,000, then the max loan the lender will provide is $129,000.
To answer your question, no you cannot keep the price where it is because the lender won't agree to it.
You didn't say what the appraised value was, but the way it should have been negotiated was to agree to a price with the builder than included a 3% seller assist for closing costs. I would get the agent's broker involved as this is going to get messy.
2007-12-01 12:41:38 · answer #1 · answered by Anonymous · 0⤊ 0⤋
The builder certainly can refuse to negotiate. Whether he WILL refuse is another situation. You do not indicate at what level the actual appraisal came in. If the appraisal came in substantially below that, the builder might not give in. If he doesn't give in, that means you don't buy the house, since the lender isn't going to give you more than the appraisal is for.
I don't know why you asked your realtor about taking out the extra $5,000 for debt. The realtor isn't a lender. You should have inquired of the lender handling your mortgage (and the answer would have been "No, you can't.')
2007-12-01 13:04:21 · answer #2 · answered by acermill 7 · 0⤊ 0⤋
If you are getting a 100% loan, this would be 129,900. I don't know of any lenders today offering over 100% loans so that you can pay off debt.
So the builder only has to worry about the difference between the sales price of 129,990 and the actual appraisal (which you didn't say how much).
Read the contract. What does it say about appraised value. I'm sure that if the builder wants to save the deal, they will deal and make up the difference to 129,900 ONLY.
2007-12-01 12:33:51 · answer #3 · answered by Anonymous · 0⤊ 0⤋